Banks register 10.9pc credit growth

04/03/2015 07:40 AST

Credits disbursed by the commercial banks in the Sultanate to the private sector registered an increase of 10.9 per cent to RO 14.7 billion at the end of December 2014.

The share of the non-financial corporate sector stood at 47.8 per cent, closely followed by the household sector, mainly personal loans, at 45.4 per cent, financial corporations at 4.9 per cent and other sectors the remaining 1.9 per cent.

Of the total assets, credit disbursement accounted for 68 per cent and increased by 11.3 per cent during the same period to RO 16.9 billion.

The total assets of commercial banks increased by 11.1 per cent to reach RO 24.8 billion in December 2014 from RO 22.4 billion a year ago.

“Monetary management during the year continued to be faced with abundance of bank liquidity and the primary focus of Central Bank of Oman was to ensure appropriate levels of liquidity in the banking system”, the apex bank says in its monthly bulletin.

The commercial banks’ overall investments in securities increased by 14.2 per cent to RO 2.9 billion as at the end of December 2014 from RO 2.6 billion a year ago.

According to the report, of total investments, certificates of deposits issued by the Central Bank stood at RO 1.3 billion while investment in government development bonds stood at RO 564 million as at the end of December 2014.

Investments by the commercial banks in foreign securities increased by 41 per cent to reach RO 708.7 million in December 2014.

“In respect of domestic interest rate structure of commercial banks, both deposit and lending rates softened during this period”, says the report. As at the end of December 2014, narrow money stock when measured on year-on-year basis, grew sharply by 20.4 per cent driven both by the increase in demand deposits by 22.5 per cent as well as increase in currency with the public by 14.3 per cent.

The share of quasi-money to the total money stock declined to 65.1 per cent in December 2014 as compared to 66.5 per cent a year ago. Broad money supply M2 stood at RO13,766.9 million at end of December 2014, up from RO 11,937.5 million a year ago, registering an increase of 15.3 per cent during the period.

Aggregate deposits held with commercial banks registered a significant increase of 10.9 per cent to RO 17.3 billion in December 2014 from RO 15.6 billion a year ago.

Government deposits with commercial banks increased by 10.1per cent to RO 5 billion.

Deposits of public enterprises declined by 6 per cent to reach RO 0.88 billion during the same period. Private sector deposits, which constituted 64.7 per cent of total deposits with commercial banks, increased by 13.5 per cent to RO 11.2 billion in December 2014 from RO 9.9 billion a year ago.

Sectorwise, the share of households was 48.5 per cent of the total private sector deposit base, followed by non-financial corporations at 29.1 per cent, financial corporations at 20.8 per cent and other sectors at 1.6 per cent.

The balance of payments situation remained comfortable with both current account and overall position in surplus. Annual inflation rate measured by movement in the average CPI for the Sultanate stood at 1 per cent in 2014.

Oman Daily Observer