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Banking sector credit grows 3.9%

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Total outstanding credit extended by Other Depository Corporations (ODCs) – representing conventional and Islamic banks in the Sultanate of Oman - grew by 3.9 per cent to RO 28.8 billion at the end of September 2022, while credit to the private sector demonstrated an increase of 3.3 per cent (Y-o-Y) to reach RO 24.1 billion, the Central Bank of Oman (CBO) said in its latest news bulletin.

Non-financial corporations received the highest share of the total private sector credit at approximately 46.1 per cent at end-Sep 2022, followed by household sector at 45.2 per cent. The share of financial corporations was 5.1 per cent while other sectors received the remaining 3.6 per cent of total private sector credit as at end- September 2022.

Total deposits held with ODCs registered a Y-o-Y significant growth of 5.5 per cent to reach RO 26.3 billion at the end of September 2022. Total private sector deposits increased by 0.3 per cent to RO 17.3 billion. In terms of sector-wise composition of private sector deposits, the biggest contribution is from household deposits at 51.2 per cent, followed by non-financial corporations at 29.6 per cent, financial corporations at 15.6 per cent and other sectors at 2.8 per cent.

The combined balance sheet of conventional banks showed a Y-o-Y growth of 2.0 per cent in total outstanding credit as of end- September 2022. Credit to the private sector increased by 0.7 to reach RO 19.2 billion while their overall investments in securities witnessed a sharp decline by 7.6 per cent to RO 4.6 billion at end- September 2022.

Accordingly, investment in both Government Development Bonds and foreign securities decreased by 0.9 per cent to RO 2.2 billion and 22.1 per cent to RO 0.655 billion, respectively, at the end of September 2022. On the liabilities side, aggregate deposits held with the conventional banks increased by 3.4 per cent Y-o-Y to RO 21.4 billion at end-September 2022. Government deposits with conventional banks witnessed an increase of 13.2 per cent at RO 5.0 billion, and deposits of public enterprises increased by 33.4 per cent to RO 1.7 billion. Private sector deposits, which accounted for 66.7 per cent of total deposits with conventional banks, decreased by 1.6 per cent as of September 2022 to reach RO 14.2 billion.

The total assets of Islamic Banks and Windows increased by 10.6 per cent on a Y-o-Y basis to RO 6.3 billion and constituted about 16.3 per cent of the banking system's assets at end- September 2022. Islamic banking entities provided financing of RO 5.2 billion at the end of September 2022, recording a growth of 10.7 per cent over that a year ago. Total deposits held with Islamic banks and windows increased by 14.1 per cent to RO 4.8 billion.

Among the indicators of monetary aggregates, broad money supply M2 at end- September 2022 increased by 3.7 per cent to reach RO 20.6 billion. This is attributed to the increased in narrow money (M1) by 5.0 per cent, along with 3.2 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). Looking at components of narrow money (M1) during the same period, currency with the public fell by 7.0 per cent, while demand deposit increased by 8.8 per cent.

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