MUSCAT: Total outstanding credit extended by conventional banks and Islamic windows (collectively known as Other Depository Corporations – ODCs) in the Sultanate of Oman grew by 6.5 percent to RO 30.3 billion at the end of June 2023, with credit to the private sector demonstrating an increase of 7.0 percent (Y-o-Y) to reach RO 25.4 billion.
Non-financial corporations received the highest share of the total private sector credit at approximately 45.9 percent at end-June 2023, followed by household sector at 44.4 percent. The share of financial corporations was 6.0 percent while other sectors received the remaining 3.7 percent of total private sector credit as at end- June 2023.
Total deposits held with ODCs registered a Y-o-Y significant growth of 4.4 percent to reach RO 27.5 billion at the end of June 2023. Total private sector deposits increased by 2.7 percent to RO 18.0 billion. In terms of sector-wise composition of private sector deposits, the biggest contribution is from household deposits at 51.8 percent, followed by non-financial corporations at 29.6 percent, financial corporations at 15.6 percent and other sectors at 2.9 percent.
The combined balance sheet of conventional banks showed a Y-o-Y growth of 5.1 percent in total outstanding credit as of end-June 2023. Credit to the private sector increased by 5.4 percent to reach RO 20.2 billion while their overall investments in securities witnessed a decline by 5.9 percent to RO 4.6 billion at end-June 2023.
Investment in Government Development Bonds marginally decrease by 5.1 percent to RO 2.1 billion, while foreign securities increased dramatically by 90.8 percent to RO 1.3 billion, at the end of June 2023. On the liabilities side, aggregate deposits held with the conventional banks increased by 3.1 percent Y-o-Y to RO 22.2 billion at end-June 2023. Government deposits with conventional banks witnessed an increase of 7.7 percent at RO 5.4 billion, and deposits of public enterprises increased by 1.6 percent to RO 1.6 billion. On the other hand, private sector deposits, which accounted for 66.4 percent of total deposits with conventional banks, increased by 2.1 percent as of June 2023 to reach RO 14.8 billion.
The total assets of Islamic Banks and Windows increased by 12.6 percent on a Y-o-Y basis to RO 7.0 billion and constituted about 17.2 percent of the banking system's assets at end-June 2023. Islamic banking entities provided financing of RO 5.8 billion at the end of June 2023, recording a growth of 12.8 percent over that a year ago. Total deposits held with Islamic banks and windows increased by 10.5 percent to RO 5.2 billion.
Among the indicators of monetary aggregates, broad money supply M2 at end-June 2023 increased slightly by 2.8 percent to reach RO 21.4 billion. Despite the decline in narrow money (M1) by 4.8 percent, the increase in M2 is attributed to the 5.9 percent increase in quasi-money (Rial Omani saving and time deposits, certificates of deposit issued by banks, margin deposits and foreign currency denominated deposits).