Banking sector credit in Oman rises to RO 27.2 billion: CBO

Rising trend: Islamic banking entities provided financing of RO 4.5 billion at the end of March 2021, recording a growth of 11.0 per cent over that a year ago

BUSINESS REPORTER

MUSCAT, MAY 12

Data issued by the Central Bank of Oman (CBO) has indicated that the total deposits held with conventional and Islamic banks (also known as other depository corporations or ODCs) registered a Y-o-Y growth of 2.5 per cent to reach RO 24.7 billion at the end of March 2021. Total private sector deposits increased by 7.3 per cent to RO 17.1 billion.

The nominal GDP, as per the preliminary data released by National Centre for Statistics and Information (NCSI), showed a decline of 15.3 per cent during the fourth quarter of 2020 over the same period of 2019. The contraction was driven by a decline in output of both the hydrocarbon sector by 23.4 per cent and non-hydrocarbon sector by 10.5 per cent. The Omani oil average price during March 2021 at $49.5 per barrel was lower by 23.1 per cent than that in March 2020.

The average daily oil production at 953.6 thousand barrels during March 2021 declined by 4.5 per cent. The Sultanate’s Consumer Price Index (CPI) showed a y-o-y deflation of 1.1 per cent during March 2021.

The total outstanding credit extended by ODCs grew by 3.0 per cent to RO 27.2 billion at the end of March 2021, while credit to the private sector demonstrated a relatively moderate growth of 0.9 per cent (Y-o-Y) to reach RO 23.3 billion.

The shares of the non-financial corporate sector and the household sector (mainly under personal loans) in the total private sector credit stood at 46.8 per cent and 45 per cent, respectively, at end-March 2021. The share of financial corporations was 4.9 per cent and other sectors received the remaining 3.3 per cent of the total private sector credit as at end-March 2021.

In terms of sector-wise composition of private sector deposits, the share of household deposits stood at 51.0 per cent, followed by non-financial corporations at 32.7 per cent, financial corporations at 13.9 per cent and the other sectors at 2.4 per cent.

The combined balance sheet of conventional banks showed a Y-o-Y growth of 1.5 per cent in total outstanding credit as of end- March 2021. Credit to the private sector declined by 0.7 to reach RO 19.1 billion while their overall investments in securities went up by 24.9 per cent to RO 4.6 billion at end-March 2021.

Investment in Government Development Bonds increased by 5.3 per cent compared to the same period last year to RO 1.8 billion while their investments in foreign securities declined by -13.9 per cent to RO 0.96 billion at the end of March 2021.

Aggregate deposits held with the conventional banks increased by 0.8 percent Y-o-Y to RO 20.7 billion at end- March 2021.

Government deposits with conventional banks witnessed a decrease of 10.5 per cent at RO 4.4 billion, likewise, deposits of public enterprises declined by 19.7 per cent to RO 1.2 billion. Private sector deposits, which accounted for 70.4 per cent of total deposits with conventional banks, increased by 6.7 per cent as of March 2021 to reach RO 14.6 billion.

Islamic banking entities provided financing of RO 4.5 billion at the end of March 2021, recording a growth of 11.0 per cent over that a year ago.

Total deposits held with Islamic banks and windows increased by 12.7 per cent to RO 3.9 billion. The total assets of Islamic banks and Windows increased by 12.2 per cent on a Y-o-Y basis to RO 5.4 billion and constituted about 14.7 per cent of the banking system’s assets as at end-March 2021.