MUSCAT: The banking sector in the Sultanate continued to witness a reasonable growth and supported the economic diversification initiatives including credit needs of all segments with added emphasis on the SMEs sector.
The total outstanding credit extended by other depository corporations stood at RO23.7 billion as at the end of January 2018, a growth of 7.3 per cent over the level witnessed a year ago. Credit to the private sector increased by 5.8 per cent to RO21.1 billion as at the end of January 2018.
Of the total credit to the private sector, the household sector (mainly under personal loans) stood at 46 per cent closely followed by the non-financial corporate sector at 45.8 per cent while financial corporations and other sectors obtained 4.8 per cent and 3.4 per cent respectively.
Total deposits registered a growth of 5.1 per cent to RO21.7 billion, with private sector deposits growing by 5.1 per cent to RO14.1 billion as at the end of January 2018.
Sector-wise, the contribution of households in total private sector deposits was 48.3 per cent, followed by non-financial corporations at 29.7 per cent, financial corporations at 19.3 per cent, and the other sectors at 2.7 per cent.
Economic recovery: After economic slowdown and contraction witnessed during the years 2015 and 2016, the Omani economy registered a broad-based recovery and grew in nominal terms by 10.1 per cent during the first nine months of 2017.
Hydrocarbon and non-hydrocarbon sector grew by 23.9 per cent and 4.9 per cent, respectively during this period.
The upturn in the economy was mainly driven by recovery in crude oil prices and the positive impact of diversification efforts. Promotion of non-oil exports and tourism related activities is at the centre of diversification programmes.
The average price of Omani crude oil during 2017 stood at $51.3 per barrel as against $40.1 during the previous year.
The government’s fiscal consolidation measures together with the recovery in oil prices had a salutary effect on the fiscal position too.
Inflationary conditions in the Sultanate generally remained benign with the average annual inflation based on CPI for the Sultanate during January 2018 at 1.1 per cent.
The financial health of banks in terms of asset quality, provision coverage and capital adequacy remained strong. — ONA
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