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Bank credit, deposit grow 6.6% in first half of year

 Staff Reporter


The banking sector continued to witness reasonable growth in both credit and deposits, despite the overall slowdown in the economy.

The total credit extended by banking institutions at the end of the first half of 2017 was 22.9 billion rials, registering a growth of 6.6 per cent over the same period last year.

Credit to the private sector increased by 7.4 per cent to 20.6 billion rials, according to the Central Bank of Oman (CBO) monthly report.

Of the total credit to the private sector, the household sector (mainly under personal loans) and non-financial corporate sector each contributed 45.9 per cent, while financial corporations had a share of 5.1 per cent.

Deposits grew by 6.6 per cent to 21.4 billion rials, with private sector deposits growing by 5 per cent to 13.6 billion rials. The contribution of households in the total private sector deposits was 49.6 per cent, followed by non-financial corporations at 28.7 per cent.

Conventional banks saw a 3.9 per cent growth in credit during the period, mainly owing to that to the private sector increasing by 5.5 per cent to 18.1 billion rials.

Islamic banking entities provided finance of 2.8 billion rials compared to 2.1 billion rials last year. Total deposits held with Islamic banks and windows also registered a significant increase to 2.7 billion rials from 1.8 billion rials. The total assets of Islamic banks and windows combined, amounted to 3.6 billion rials, constituting about 11.6 per cent of the banking system assets.

Investments in securities grew by 8 per cent to 2.8 billion rials, with that in Government Treasury Bills and foreign securities increasing by 21.5 per cent and 17.6 per cent, respectively. Investment in Government Development Bonds and Government Sukuk increased marginally by 0.7 per cent to 1.3 billion rials.

Aggregate deposits with conventional banks grew moderately by 2.7 per cent to 18.7 billion rials from 18.2 billion rials. Government deposits went up by 4.5 per cent to 5 billion rials, and those of public enterprises fell marginally by 0.2 per cent to 1.1 billion rials.

Private sector deposits which accounted for 65.6 per cent of total deposits with conventional banks, increased by 2.4 per cent to 12.3 billion rials.

The core capital and reserves of conventional banks stood at 4.1 billion rials.

Narrow money stock (M1) registered a year-on-year increase of 1.3 per cent to 5.4 billion rials. Quasi-money grew by 5.1 per cent and broad money supply stood at 16.1 billion rials, growing by 3.8 per cent.