MUSCAT, NOV 20 - Omani crude oil prices averaged $64.3 per barrel during the first half of 2019, which was higher by 0.6 per cent over the corresponding period of last year — an uptick that also boosted the contribution of the hydrocarbon sector to GDP, the Central Bank of Oman (CBO) stated in the latest monthly review of banking and economic developments for the month of September 2019. Daily crude production was up 0.2 per cent to 970.6 thousand barrels during this period, the apex bank stated. It noted that the hydrocarbon sector grew in nominal terms by 2.1 per cent during the first half of 2019 with nominal GDP emanating from crude oil and natural gas increasing by 1.5 per cent and 5.6 per cent, respectively.
However, despite the “robust pace” at which the Omani economy expanded for two consecutive years, it contracted in nominal terms during the first half of 2019, the Central Bank stated in its newly published review.
“The nominal Gross Domestic Product (GDP) declined by 1.9 per cent during the first half of 2019. The nominal contraction in the economy was driven by the non-hydrocarbon sector that declined by 3.4 per cent mainly because of a drop in nominal GDP emanating from the non-petroleum industrial activities and the services sector,” it said.
Inflationary conditions, the Central Bank noted, remained benign as the retail inflation averaged 0.3 per cent during Jan-Sept 2019 in comparison with 0.9 per cent during the same period of last year.
Commenting on the performance of the banking industry, the CBO said the sector continued to “perform well in terms of meeting credit requirements and providing other banking services.
Total outstanding credit extended by other depository corporations (ODCs), consisting of conventional banks and Islamic banking entities, increased year-on-year (YoY) by 4.2 per cent to RO 25.9 billion at the end of September 2019. Credit to the private sector grew YoY by 3.4 per cent to RO 22.7 billion during this period.
“The sectoral composition indicates that the non-financial corporate sector received the largest share in private sector credit at 46.2 per cent, followed by the household sector (mainly under personal loans) with 45.2 per cent, financial corporations with 5.2 per cent and other sectors with 3.4 per cent,” the report said.
Total deposits held with ODCs increased YoY by 3.3 per cent to RO 23.2 billion, with private sector deposits witnessing a growth of 6.3 per cent to RO 15 billion at the end of September 2019.
Households accounted for 49.5 per cent of total private sector deposits, while non-financial corporations, financial corporations, and other sectors accounted for 30.3 per cent, 17.9 per cent and 2.3 per cent, respectively.
Total outstanding credit extended by conventional banks increased YoY by 2.7 per cent as of end-September 2019, with credit to the private sector growing by 1.3 per cent to RO 19 billion. Conventional banks’ total investments in securities increased YoY considerably by 11.3 per cent to RO 3.6 billion at the end of September 2019 — out of which, the investment in Government Treasury Bills stood at RO 293.2 million.
Aggregate deposits of conventional banks increased by 2.1 per cent to RO 19.7 billion at the end of September 2019 from RO 19.3 billion a year ago. Private sector deposits increased YoY by 3.4 per cent to RO 12.8 billion and constituted 65.1 per cent of total deposits with conventional banks. The core capital and reserves of conventional banks stood at RO 4.9 billion as of end-September 2019, the Central Bank said.
The financing by Islamic banking entities continued to expand and stood at RO 3.9 billion at the end of September 2019, higher than RO 3.5 billion a year ago. Total deposits held with Islamic banks and windows also increased to RO 3.5 billion from RO 3.1 billion a year ago.
The total assets of Islamic banks and Windows combined amounted to RO 4.8 billion, constituting 13.8 per cent of the banking system assets at the end of September 2019, the apex bank added.
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