MUSCAT, AUGUST 31 - The balance sheet size of Islamic banking entities in the Sultanate (comprising two full-fledged Islamic banks and six Islamic windows) expanded by 15.3 per cent to reach RO 4.4 billion in 2018, up from RO 3.8 billion a year earlier, according to the Central Bank of Oman (CBO).Much of the impetus for this growth came from financing, the apex bank stated in its 2018 Annual Report. Financing constituted 81.2 per cent of total assets, while investments accounted for 5.7 per cent last year.
“Islamic banking continued to make robust progress and emerged as a major stakeholder by contributing significantly to the financial intermediation in the Sultanate,” said the Central Bank in its report. “Islamic banking has been successful in providing an alternative avenue of financial intermediation,” it noted, citing in this regard the IMF’s recent paper titled ‘Core Principles for Islamic Finance Regulations and Assessment Methodology’, which also recognized the increasing importance of Islamic banking in Oman.
On the liabilities sides, Islamic banks persisted with their dependence mainly on deposits for funding, although deposits growth decelerated during 2018. Deposits totalled RO 3.26 billion in 2018, up 9.8 per cent from the previous year’s tally of RO 2.97 billion. Islamic banks constituted about 13 per cent of the total banking sector assets in the Sultanate at the end of 2018.
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