2.4pc growth in banking sector credit

Total outstanding credit extended by conventional and Islamic banking institutions – collectively known as other depository corporations (ODCs) – grew 2.4 per cent to RO 26.3 billion by the end of June 2020, according to the Central Bank of Oman (CBO).

Credit to the private sector rose by 2.2 per cent to RO 23 billion, the apex bank stated in the monthly review of banking and monetary developments for June 2020.

Of the total credit to the private sector, the non-financial corporate sector and the household sector (mainly under personal loans) received a share of 47.1 per cent and 44.4 per cent, respectively, while the financial corporations received 5.3 per cent and other sectors the remaining 3.2 per cent.

Total deposits held with ODCs reached RO 23.9 billion at the end of June 2020, increasing by 3.9 per cent from June 2019. Total private sector deposits increased by 9.6 per cent to RO 16.3 billion.

Looking at the sectorwise analysis of private sector deposits, the share of households was largest at 50.7 per cent, followed by non-financial corporations at 31.8 per cent, financial corporations at 15.1 per cent and the other sectors at 2.4 per cent.

The combined balance sheet of conventional banks indicates an annual growth of 1.5 per cent in total outstanding credit as of end-June 2020. Conventional banks’ credit to the private sector increased by 1 per cent to RO 19.1 billion. Conventional banks’ overall investments in securities amounted to RO 3.9 billion.

Investment in Government Development Bonds increased by 24.5 per cent over the year to RO 1.8 billion. Banks also invested RO 264.8 million in Government Treasury Bills, while their investments in foreign securities stood at RO 1.1 billion at the end of June 2020, the CBO report stated.

Aggregate deposits held with conventional banks increased to RO 20.4 billion in June 2020, registering a growth of 3.4 per cent over the level a year ago. Government deposits with conventional banks decreased by 9.8 per cent to RO 4.9 billion, while deposits of public enterprises increased by 5.4 per cent to RO 1.1 billion. Private sector deposits, which accounted for 68.9 per cent of total deposits with conventional banks, increased by 8.8 per cent to RO 14.1 billion.

Islamic banking entities provided financing of RO 4.1 billion by the end of June 2020, recording a growth of 7.4 per cent over the corresponding figure for 2019. Total deposits held with

Islamic banks and windows increased by 7.2 per cent to RO 3.5 billion. The total assets of Islamic Banks and Windows stood at RO 4.9 billion and constituted about 14 per cent of the banking system’s assets as at end-June 2020.

Oman Observer

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