Private sector credit climbs 4.2 per cent: CBO

Muscat, MAY 26 - Banking credit to the private sector increased 4.2 per cent to RO 22.4 billion as of March 31, 2019, the Central Bank of Oman (CBO) announced in its monthly review of banking and monetary developments issued yesterday.

Of the total credit to the private sector, the share of the non-financial corporate sector stood at 46.1 per cent, while the household sector (mainly personal loans) garnered a 45.1 per cent share. Credit to financial corporations and other sectors stood at 5.5 per cent and 3.4 per cent respectively, the apex bank stated.

“The banking sector in Oman continued to support growth in economic activities by providing credit and other banking services to all segments, especially to those within the non-oil activities (space) and to SMEs,” the report noted.

Total deposits held by depository corporations (DCs) increased 3.4 per cent to RO 23 billion, with private sector deposits growing 2.9 per cent to RO 14.6 billion by March-end 2019. Sector-wise, the contribution of households to total private sector deposits was 49.4 per cent, followed by non-financial corporations at 30.7 per cent, financial corporations at 17.4 per cent, and the other sectors at 2.5 per cent, the CBO report said.

“A review of the activities of conventional banks indicates an annual growth in total outstanding credit disbursement of 4 per cent as at the end of March 2019. Credit to the private sector grew by 2 per cent to RO 18.9 billion. Conventional banks’ overall investments in securities increased by 5.6 per cent to RO 3.4 billion,” the Central Bank stated.

Significantly, aggregate deposits held by conventional banks also inched up 3.5 per cent to RO 19.8 billion by March 2019, up from RO 19.1 billion a year ago, the report said. Government deposits with conventional banks increased by 6.3 per cent to RO 5.5 billion, while deposits of public enterprises increased by 21.8 per cent to RO 1.2 billion during the same period. Private sector deposits, which accounted for 64.2 per cent of total deposits with conventional banks, increased marginally by 1.9 per cent to RO 12.7 billion. The core capital and reserves of conventional banks as of March 31, 2019 stood at RO 4.9 billion.

Financing provided by Islamic banking entities climbed to RO 3.7 billion by March 31, 2019, versus RO 3.2 billion a year ago. Total deposits held with Islamic banks and windows also increased to RO 3.25 billion in March 2019 from RO 3.16 billion a year ago. The total assets of Islamic banks and windows combined amounted to RO 4.5 billion by March 2019, and constituted about 13.3 Per cent of the banking system assets.

“Nonoil economic activities continue to gain traction with sustained policy efforts and increased participation of private sector. Inflationary conditions remained benign and headline inflation stood at 0.2 per cent in March 2019, as compared to 0.8 per cent a year ago. The Omani oil price averaged $61.0 a barrel in March 2019 in comparison with $ 62.9 per barrel during March 2018,” the report further added.