Oman's bank credit expands 8.6% in August as deposits climb 7%

20/10/2025 04:48 AST

Total outstanding credit extended by Oman's banking sector grew by 8.6% year-on-year to reach RO34.1bn at the end of August 2025, according to the latest data released by the Central Bank of Oman (CBO).

Of the total, lending to the private sector rose by 6.5% year-on-year to RO28bn. Within the private sector, non-financial corporations accounted for the largest share at 46.7%, followed by households at 44.7%. Financial corporations represented 5.7%, while other sectors made up the remaining 2.9%.

Growth in overall credit was supported by both conventional banks and Islamic banking entities. The combined balance sheet of conventional banks recorded a 7.3% year-on-year increase in total outstanding credit as of end-August 2025.

Credit to the private sector by conventional banks rose by 4.5% to RO21.4bn, while their total investments in securities grew by 3.2% to RO6.1bn. Investment in government development bonds climbed 12% to RO2.2bn, whereas investments in foreign securities declined 7% to RO2.3bn.

Meanwhile, Oman's Islamic banking industry maintained its strong growth momentum in 2025. Islamic banking entities provided total financing of RO7.3bn at the end of August, up 13.5% compared with a year earlier.

The total assets of Islamic banks and windows rose by 15.1% year-on-year to RO9.1bn, representing about 19.7% of the banking system's total assets at end-August 2025.

Deposits rise to RO33.3bn
According to the CBO data, total deposits held with the banking sector increased by 7% year-on-year to RO33.3bn at the end of August 2025. Private sector deposits rose by 7.5% to RO22.4bn.

Within private sector deposits, households accounted for 50%, followed by non-financial corporations at 30.6%, financial corporations at 17.2%, and other sectors at 2.2%.

Aggregate deposits with conventional banks grew by 5.5% year-on-year to RO26.1bn at end-August. Government deposits with conventional banks increased by 9.6% to RO5.9bn, while public enterprise deposits fell by 7.8% to RO1.7bn.

Private sector deposits, which accounted for 67% of total deposits with conventional banks, rose by 6.1% to RO17.5bn.

Deposits with Islamic banks and windows surged by 12.9% year-on-year to RO7.2bn at the end of August 2025.

Interest rates ease further
The weighted average interest rate on local currency deposits with conventional banks fell from 2.704% at end-August 2024 to 2.535% a year later. The weighted average lending rate also eased, declining from 5.603% to 5.492% over the same period, the CBO data showed.

The overnight Omani rial interbank lending rate dropped to 4.012% in August 2025 from 5.133% a year earlier.

According to the CBO, the easing of interest rates reflected a reduction in its average repo rate for liquidity injection, which declined to 5.00% in August 2025 from 6.00% a year earlier, in line with the US Federal Reserve's policy rate adjustments.