Muscat: GCC listed banks have maintained sufficient capital buffers and remained fairly liquid, according to the fifth edition of KPMG’s ‘GCC listed banks’ results’ report, which analyses the published results of listed commercial banks across the region for the year ended December 31, 2019. The report, titled ‘New Age Banking,’ has shown that the banking sector in Oman has been resilient in the face of tightening operating conditions since the decline in oil price.
The Oman banking sector experienced a growth of 4.3 per cent in total assets for the top eight banks, with a 4.7 per cent decline in profits mainly due to higher than expected credit losses in 2019. The average CAR stood at 17 per cent in 2019, reflecting sufficient capital buffers.
Speaking about the report, Kenneth Macfarlane, Partner in Charge, KPMG Oman, commented: “Our analysis has identified an overall positive trend for the financial sector in Oman, which, given the unique circumstances the region has witnessed in recent years, is particularly impressive. This reflects the continued resilience of the banking sector.”
On another note, the Covid-19 pandemic is having an unprecedented impact on financial markets globally and locally and creating a unique situation for the industry. Experts agree that the sector will be dealing with the effects of this pandemic for the foreseeable future, leading the banking sector to evolve, and only agile and flexible banks that are willing to transform will succeed and secure future growth.
“In order for banks to emerge stronger in light of the current pandemic, they will need to evolve faster than ever before and offer innovative ‘new age banking’ solutions, such as artificial intelligence and digital branches. Partnering with fintech solution providers will help them advance their business platforms,” added Macfarlane.
Additional insights in the report find that regional banks have remained resilient in terms of profitability and asset growth. They do, however, need to continue to focus on managing the credit quality of their loan portfolios to ensure this resilience can be maintained.