Total banking credit rises 3% to RO 27.2 billion: CBO

BUSINESS REPORTER

MUSCAT, JUNE 21

The total outstanding credit extended by conventional and Islamic banks (collectively known as Other Depository Corporations / ODCs) in the Sultanate grew 3.0 per cent to RO 27.2 billion at the end of April 2021, the Central Bank of Oman (CBO) said in its monthly report for April.

Credit to the private sector demonstrated a relatively moderate growth of 1.2 per cent (Y-o-Y) to reach RO 23.3 billion, it said. Of this total, the shares of the non-financial corporate and household sectors (mainly under personal loans) stood at 46.7 per cent and 45.1 per cent respectively at the end of April 2021. The share of financial corporations was 4.8 per cent and other sectors received the remaining 3.4 per cent of the total private sector credit.

Total deposits held with ODCs registered a Y-o-Y growth of 4.1 per cent to reach RO 24.9 billion at the end of April 2021. Total private sector deposits increased by 6.8 per cent to RO 17.3 billion. Deposits from households accounted for 50.9 per cent of total private sector deposits, followed by non-financial corporations (32.4 per cent), financial corporations (14.2 per cent) and the other sectors (2.5 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-April 2021. Credit to the private sector declined by 0.4 to reach RO 19.1 billion while their overall investments in securities went up by 40.6 per cent to RO 4.8 billion at end-April 2021. Investment in Government Development Bonds increased by 27.3 per cent compared to the same period last year to RO 2.2 billion while their investments in foreign securities declined by 9.9 per cent to RO 0.88 billion at the end of April 2021.

Aggregate deposits held with the conventional banks increased by 2.3 per cent Y-o-Y to RO 20.9 billion at end-April 2021. Government deposits with conventional banks witnessed a decrease of 8.9 per cent at RO 4.4 billion, likewise, deposits of public enterprises declined by 2.2 per cent to RO 1.3 billion. Private sector deposits, which accounted for 70.6 per cent of total deposits with conventional banks, increased by 6.1 per cent as of April 2021 to reach RO 14.7 billion.

Islamic banking entities provided financing of RO 4.5 billion at the end of April 2021, recording a growth of 11.2 per cent over that a year ago. Total deposits held with Islamic banks and windows increased by 14.7 per cent to RO 4.1 billion. The total assets of Islamic Banks and Windows increased by 11.6 per cent on a Y-o-Y basis to RO 5.5 billion and constituted about 14.6 per cent of the banking system’s assets as at end-April 2021.

Among the indicators of monetary aggregates, broad money supply M2 at end-April 2021 grew by 5.8 per cent to reach RO 20 billion.

This increase was the outcome of 4.1 per cent expansion in narrow money (M1) and 6.6 per cent increase in quasi-money (Rial Omani saving and time deposits, certificates of deposit issued by banks, margin deposits and foreign currency denominated deposits). Likewise, the increase in M1 resulted from the growth of demand deposits by 6.6 per cent, during the same period under discussion.

Positive uptrend: Investment in Government Development Bonds increased by 27.3 per cent compared to the same period last year to RO 2.2 billion