islamic finance

Oman’s Islamic banking growth likely to continue: Fitch Rating

March 28, 2021

LONDON: Oman’s Islamic banking sector growth is likely to continue apace in 2021-2022 following strong momentum in 2020 despite the pandemic and lower oil prices, Fitch Ratings says.
The credit rating agency noted that Islamic financing in Oman grew by 9.5 per cent in 2020, compared with the conventional banks’ loan growth of 2.2 per cent. This was driven by demand for Islamic products, support from conventional banks offering Islamic products through their Islamic windows and regulations supportive of Islamic finance.
The market share of Islamic banking and Islamic windows increased to 14.5 per cent at end-2020 (end-2019: 13.6 per cent), with total assets of RO 5.2 billion ($13.5 billion), Fitch Ratings said.
Oman’s Islamic banks are adequately capitalised with reasonable profitability and asset quality indicators, reflecting conservative regulation and relatively low-risk business models, payment holidays and flexibility allowing banks not to classify financing as impaired when payments are deferred mask underlying asset quality, the credit rating agency said.
The Central Bank of Oman (CBO) is working on offering Islamic liquidity management through remunerative deposit accounts and a standing liquidity facility, and by acting as lender of last resort.
It is also working to expand domestic-currency Sukuk issuance, which should increase Sharia-compliant options for Islamic banks and help them to manage their liquidity. Sukuk issuance currently represents about 22 per cent of total listed bond and Sukuk issuance in Oman, Fitch Ratings said.

omanobserver

Top News



islamic finance

For the first time in the Sultanate, Ali...
April 20, 2021
Great offers from Alizz Islamic Bank dur...
April 20, 2021
Ahli Islamic holds first Qitaf quarterly...
April 18, 2021