The combined balance sheet of commercial banks at the end of September 2009 continued to indicate a resilient banking sector that has remained largely insulated from adverse external developments emanating from adjustments in the pattern of global aggregate demand, the Central Bank of Oman (CBO) said in its assessment of banking and monetary developments during September 2009.

The accommodative monetary policy pursued by the CBO and the countercyclical fiscal stimulus extended by the Government helped sustain domestic demand in 2009. Despite some moderation in growth of credit, which could partly be attributed to risk-averse behaviour of commercial banks and partly to the slowdown of the economy, total assets increased by 7.8 per cent to RO 13,943.6 million in September 2009 from RO 12,937.1 million a year ago.

The expansion in assets was driven by 11.1 per cent growth in credit which stood at RO 9,618.1 million as at the end of September 2009 compared to RO 8,659.6 million at the end of September 2008. Outstanding investments in securities (both domestic and foreign) increased by 24 per cent to RO 1,675.8 million from RO 1,351.1 million a year ago.

In particular, outstanding investments in CBO CDs increased to RO 1,298.1 million at the end of September 2009 from RO 785.9 million as at the end of September 2008, while commercial banks’ outstanding investments in foreign securities decreased by 44.9 per cent to RO 240.1 million from RO 785.9 million during the same period. Although assets held in the form of cash and deposits with the CBO stood lower at RO 725.8 million at the end of September 2009 as against RO 950.5 million a year ago, it was well above the cash reserve ratio requirement, the apex bank said.

On the liabilities side of the balance sheet, aggregate deposits (Rial Omani plus foreign currency) of commercial banks as at the end of September 2009 witnessed a growth of 12.6 per cent to RO 8,850.3 million over its corresponding level of RO 7,857.3 million a year ago. Private sector deposits increased by 6.4 per cent to RO 6,461.4 million, representing 73 per cent of total deposits, whereas Government deposits rose by 28.6 per cent to RO 1,795.4 million, representing 20.3 per cent of total deposits, and deposits by public enterprises increased by RO 205 million to RO 593.5 million. Core capital and reserves of commercial banks at the end of September 2009 amounted to RO 1,628.4 million, representing 12 per cent of commercial banks’ total assets.

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