banking

Banking sector credit climbs 4pc to RO 26.9 billion

April 17, 2021

Total outstanding credit extended by conventional and Islamic banks (together known as Other Depository Corporations or ODCs) grew by 4.0 per cent to RO 26.9 billion at the end of February 2021, the Central Bank of Oman (CBO) said in its latest monthly report.
Credit to the private sector demonstrated a relatively moderate growth of 1.4 per cent (Y-o-Y) to reach RO 23.1 billion, it stated.
Total deposits held with ODCs registered a Y-o-Y growth of 5 per cent to reach RO 24.8 billion at the end of February 2021, while total private sector deposits increased by 10.7 per cent to RO 17.0 billion.
The shares of non-financial corporate sector and the household sector (mainly under personal loans) in the total private sector credit stood at 46.7 per cent and 45.2 per cent, respectively, at end-February 2021.
The share of financial corporations was 4.8 per cent and other sectors received the remaining 3.3 per cent of the total private sector credit as at end-February 2021.
In terms of sector-wise composition of private sector deposits, the share of household deposits stood at 51.0 per cent, followed by non-financial corporations at 32.4 per cent, financial corporations at 14.1 per cent and the other sectors at 2.5 per cent.
The combined balance sheet of conventional banks showed a Y-o-Y growth of 2.9 per cent in total outstanding credit as of end-February 2021.
Credit to the private sector remained unchanged Y-o-Y at RO 18.9 billion while their overall investments in securities went up by 14.5 per cent to RO 4.3 billion at end-February 2021.
Investment in Government Development Bonds increased by 2.3 per cent compared to the same period last year to RO 1.8 billion while their investments in foreign securities declined by 7.9 per cent to RO 1.1 billion at the end of February 2021.
Aggregate deposits held with the conventional banks increased by 4.1 per cent Y-o-Y to RO 20.9 billion at end- February 2021.
Government deposits with conventional banks witnessed a decrease of 14.4 per cent at RO 4.4 billion, likewise, deposits of public enterprises increased by 3.9 per cent to RO 1.3 billion.
Private sector deposits, which accounted for 69.9 per cent of total deposits with conventional banks, increased by 11.0 per cent as of February 2021 to reach RO 14.6 billion.
Islamic banking entities provided financing of RO 4.4 billion at the end of February 2021, recording a growth of 9.9 per cent over that a year ago.
Total deposits held with Islamic banks and windows increased by 10.0 per cent to RO 3.8 billion. The total assets of Islamic Banks and Windows increased by 11.0 per cent on a Y-o-Y basis to RO 5.4 billion and constituted about 14.5 per cent of the banking system’s assets as at end- February 2021.
Among the indicators of monetary aggregates, broad money supply M2 at end- February 2021 grew by 10.3 per cent to reach RO 19.8 billion.
This increase was the outcome of 9.4 per cent expansion in narrow money (M1) and 10.7 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). Likewise, the increase in M1 resulted from the growth of both currency with public and demand deposits by 7.5 per cent and 9.9 per cent, respectively, during the same period under discussion.
The weighted average interest rate on RO deposits witnessed a marginal increase from 1.981 per cent at end February 2020 to 2.011 per cent at end-February 2021, similarly the weighted average RO lending rate decreased from 5.509 per cent to 5.451 per cent over the same period.
Meanwhile, the overnight Rial Omani domestic inter-bank lending rate fell significantly to 0.546 per cent in February 2021 from 1.868 per cent a year ago, reflecting transmission of policy rate cuts by the CBO in line with the rate cuts by the Federal Reserve.
The average Repo rate for liquidity injection by the CBO at end-February 2021 stood lower at 0.5 per cent compared with 2.150 per cent a year ago.

omanobserver

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