Banking sector credit climbs to RO 29.8 billion

BUSINESS REPORTER

MUSCAT, APRIL 5

Credit extended by conventional and Islamic banks, collectively known as Other Depository Corporations (ODCs) grew by 6.8 per cent to RO 29.8 billion at the end of February 2023, with credit to the private sector demonstrating an increase of 5.3 per cent (Y-o-Y) to reach RO 24.8 billion, the Central Bank of Oman (CBO) stated in its latest newsletter.

Non-financial corporations received the highest share of the total private sector credit at approximately 46.1 per cent at end-Feb 2023, followed by household sector at 44.7 per cent. The share of financial corporations was 5.6 pe rcent while other sectors received the remaining 3.7 pe rcent of total private sector credit as at end- February 2023, the apex bank said.

Total deposits held with ODCs registered a Y-o-Y significant growth of 2.9 per cent to reach RO 26.6 billion at the end of February 2023. Total private sector deposits increased by 0.53 per cent to RO 17.5 billion. In terms of sector-wise composition of private sector deposits, the biggest contribution is from household deposits at 51.8 per cent, followed by non-financial corporations at 28.6 percent, financial corporations at 16.8 per cent and other sectors at 2.8 per cent.

The combined balance sheet of conventional banks showed a Y-o-Y growth of 5.4 per cent in total outstanding credit as of end-February 2023. Credit to the private sector increased by 2.9 per cent to reach RO 19.7 billion while their overall investments in securities witnessed a decline by 14.0 per cent to RO 4.5 billion at end- February 2023.

Investment in Government Development Bonds marginally increase by 1.7 per cent to RO 2.2 billion, while foreign securities increased by 31.7 per cent to RO 1.1 billion, at the end of February 2023.

On the liabilities side, aggregate deposits held with the conventional banks increased by 1.5 per cent Y-o-Y to RO 21.7 billion at end-February 2023.

Government deposits with conventional banks witnessed an increase of 4.7 per cent at RO 5.1 billion, and deposits of public enterprises increased by 21 per cent to RO 1.6 billion. On the other hand, private sector deposits, which accounted for 66.7 per cent of total deposits with conventional banks, decreased by 1.0 per cent as of February 2023 to reach RO 14.5 billion.

The total assets of Islamic Banks and Windows increased by 8.8 per cent on a Y-o-Y basis to RO 6.5 billion and constituted about 16.3 per cent of the banking system's assets at end-February 2023. Islamic banking entities provided financing of RO 5.5 billion at the end of February 2023, recording a growth of 13.5 per cent over that a year ago. Total deposits held with Islamic banks and windows increased by 9.6 per cent to RO 4.9 billion.