Bank lending in Oman jumps 8.4%, deposits grow 7.6% in H1

19/08/2025 04:17 AST

Total outstanding credit extended by Oman's banking sector, including both conventional and Islamic banks, grew by 8.4% year-on-year to reach RO34.1bn as of June 2025, according to statistics released by the Central Bank of Oman (CBO).

Within this total, bank credit to the private sector increased by 6.6% to RO28bn. Non-financial corporations accounted for the largest share of private sector credit at 45.9% as of the end of June 2025, followed closely by the household sector at 44.2%. Financial corporations received 6.2%, while other sectors made up the remaining 3.7%.

Conventional banks' total outstanding credit grew by 7.2% year-on-year in June 2025, as per the CBO's latest monthly statistical bulletin.

Credit to the private sector by conventional banks rose by 4.8% to RO21.5bn, while their overall investments in securities increased by 1.3% to RO5.7bn. Investment in government development bonds rose by 5.1% year-on-year to RO2bn in June, while investments in foreign securities declined by 6% to RO2.1bn.

On the other hand, total deposits in Oman's banking sector grew by 7.6% to reach RO33bn as of June 2025, compared with the same period a year earlier.

Private sector deposits increased by 6% to RO21.9bn. The household sector contributed the most to private sector deposits at 49.4%, followed by non-financial corporations at 31%, financial corporations at 17.4%, and other sectors at 2.2%.

Deposits held with conventional banks grew by 4.7% year-on-year to RO25.8bn as of June 2025. Private sector deposits, which represented 66.4% of total deposits with conventional banks, increased by 4% to RO17.1bn.

Government deposits with conventional banks rose by 9.9% to RO5.9bn, while deposits of public enterprises fell by 7.3% to RO1.7bn.

Islamic banking assets reach RO9.2bn
The total assets of Islamic banks and windows in Oman increased by 17.4% year-on-year, reaching RO9.2bn by the end of June 2025. Islamic assets now constitute approximately 19.9% of the total banking system's assets.

Islamic banking entities provided financing amounting to RO7.2bn at the end of June 2025, reflecting a growth of 13.1% compared with the previous year.

Total deposits held with Islamic banks and windows rose by 19.6% to RO7.2bn.

Interest rates ease
Interest rates in Oman recorded a slight decline during the first half of this year.

According to CBO data, the weighted average interest rate on Omani rial deposits with conventional banks fell from 2.651% at the end of June 2024 to 2.560% by June 2025, while the weighted average lending rate decreased from 5.581% to 5.487% over the same period.

Meanwhile, the overnight Omani rial domestic inter-bank lending rate dropped to 4.189% in June 2025, down from 5.402% a year earlier. 'This [decline in interest rates] is an outcome of the decrease in the average repo rate for liquidity injection by the CBO to 5.0% from 6.0% a year ago, in line with US Federal Reserve policy rates,' the CBO stated in its bulletin.

Muscat Daily