Bank credit to private sector grows 12% in Oman

Muscat: Bank credit to the private sector increased by 11.9 per cent to OMR19.7 billion at the end of October 2016, over the same period last year. Of the total credit to the private sector, the household sector, mainly due to personal loans, stood at 46.1 per cent, closely followed by the non-financial corporate sector at 45.7 per cent, financial corporations at 5 per cent and other sectors made up the remaining 3.2 per cent.
Total deposits registered a growth of 5 per cent to OMR20.5 billion at the end of October 2016. Private sector deposits of the banking system registered growth of 4.4 per cent to OMR13 billion at the end of October 2016.
Sector-wise, the share of households was 49 per cent of the total private sector deposit base, followed by non-financial corporations at 28.3 per cent, financial corporations at 19.5 per cent and other sectors at 3.2 per cent.
The activities of conventional banks alone show a fairly robust annual growth in total outstanding credit of 7.1 per cent at the end of October 2016. Credit to the private sector increased by 9.6 per cent to reach OMR17.6 billion at the end of October 2016
Conventional banks' overall investments in securities stood at OMR2.9 billion at the end of October 2016. Investment in Government Development Bonds and Government Sukuk increased 31.6 per cent over the year, to reach OMR989 million at the end of October 2016. Banks also invested OMR406.9 million in Government Treasury Bills at the end of October 2016.
Meanwhile, the banking sector remained resilient, supporting the economic diversification initiatives and credit needs. The combined balance sheet of conventional and Islamic banks, and other depositary corporations, taken together, provides a complete overview of the financial intermediation taking place in the banking system in the Sultanate.
The total outstanding credit extended by all financial institutions, including Islamic banks, stood at OMR21.9 billion as of the end of October 2016, a rise of 10.2 per cent over the level witnessed one year ago.
The low oil prices have brought to the fore several challenges to the Omani economy,as authorities continue to monitor the situation closely, taking appropriate policy measures when warranted. With the hydrocarbon sector still fundamental to the economy, oil prices have impacted overall economic activity adversely, according to a report released by the Central Bank of Oman (CBO).
Preliminary national accounts data from the Sultanate shows that the nominal gross domestic product (GDP) declined by 11.1 per cent during the first half of 2016, compared to the same period last year. Nominal GDP derived from the petroleum sector contracted by 32.9 per cent, and from the non-petroleum sector registered a marginal decrease of 1.6 per cent.
Oman Crude registered an average price of $38.3 per barrel during January-September 2016, compared to $59.8 per barrel during a similar period last year.
The fiscal situation and the current account balance in the balance of payments came under pressure during the year, and the government focused on appropriate financing of the deficits. Average annual inflation remained moderate at 1.04 per cent from January – October 2016.