Total outstanding credit extended by Other Depository Corporations (ODCs), comprising conventional and Islamic banks in the Sultanate of Oman grew by 4.1 per cent to RO 28.4 billion at the end of June 2022, the Central Bank of Oman (CBO) revealed in its latest monthly newsletter. Credit to the private sector demonstrated a slight increase of 2.3 per cent (Y-o-Y) to reach RO 23.8 billion, it said.
Non-financial corporations received the highest shares of the total private sector credit, at approximately 46.0 per cent at end-June 2022, followed by household sector at 45.4 percent. The share of financial corporations was 5.0 per cent while other sectors received the remaining 3.6 per cent of total private sector credit as at end- June 2022.
Total deposits held with ODCs registered a Y-o-Y growth of 5.4 per cent to reach RO 26.3 billion at the end of June 2022. Total private sector deposits increased by 1.0 per cent to RO 17.5 billion. In terms of sector-wise composition of private sector deposits, the biggest contribution is from household deposits at 52.1 per cent, followed by non-financial corporations at 30.0 percent, financial corporations at 15.2 per cent and other sectors at 2.7 per cent.
The combined balance sheet of conventional banks showed a Y-o-Y growth of 2.6 per cent in total outstanding credit as of end- June 2022. Credit to the private sector increased by 0.7 to reach RO 19.1 billion while their overall investments in securities went up by 2.9 per cent to RO 4.9 billion at end- June 2022. Investment in Government Development Bonds decreased by 0.8 per cent compared to the same period last year to RO 2.2 billion while their investments in foreign securities declined by 18.9 per cent to RO 0.69 billion at the end of June 2022.
On the liabilities side, aggregate deposits held with the conventional banks increased by 3.9 per cent Y-o-Y to RO 21.6 billion at end-June 2022. Government deposits with conventional banks witnessed an increase of 15.7 per cent at RO 5 billion, and deposits of public enterprises increased by 36.2 per cent to RO 1.6 billion. Private sector deposits, which accounted for 67.1 per cent of total deposits with conventional banks, decreased by 1.8 per cent as of June 2022 to reach RO 14.5 billion.
The total assets of Islamic Banks and Windows increased by 9.6 per cent on a Y-o-Y basis to RO 6.2 billion and constituted about 15.9 per cent of the banking system’s assets at end- June 2022. Islamic banking entities provided financing of RO 5.1 billion at the end of June 2022, recording a growth of 11.2 per cent over that a year ago. Total deposits held with Islamic banks and windows increased by 12.8 per cent to RO 4.7 billion.
Among the indicators of monetary aggregates, broad money supply M2 at end- June 2022 increased by 3.3 per cent to reach RO 20.8 billion. This is attributed to the increased in narrow money (M1) by 3.8 percent, along with 3.03 per cent increase in quasi-money (Rial Omani saving and time deposits, certificates of deposit issued by banks, margin deposits and foreign currency denominated deposits). Looking at components of narrow money (M1) during the same period, currency with the public fell by 5.1 percent, while demand deposit increased by 6.6 per cent.
The weighted average interest rate on RO deposits with conventional banks witnessed a marginal decrease from 1.952 per cent at end June 2021 to 1.870 per cent at end- June 2022, and the weighted average RO lending rate decreased from 5.524 per cent to 5.502 per cent over the same period. Meanwhile, the overnight Rial Omani domestic inter-bank lending rate rose to 1.450 per cent in June 2022 from 0.336 per cent a year ago. The average Repo rate for liquidity injection by the CBO at end- June 2022 witnessd an increase to 1.875 from 0.500 a year ago.
