Oman’s Commercial Banks Credit Growth, Shifting Investment Patterns In 2023

A recent analysis of traditional commercial banks’ activities in Oman for the period of July 2022 to July 2023 shows ongoing growth in credit. The total credit extended by these banks increased by 5.3 percent, reaching OMR 20.2 billion by the end of July 2023.

The Central Bank of Oman (CBO) report also noted a 4.6 percent decline in the total investments made by these banks in securities, which amounted to approximately OMR4.4 billion by the end of July 2023.

Specifically, investments in government development bonds (GDBs) saw a significant decrease of 10.4 percent, reaching OMR1.9 billion by July 2023 compared to the same period in the previous year.

In contrast, investments in foreign securities experienced substantial growth, with an increase of 89.5 percent, totaling OMR1.2 billion by the end of July 2023.

Regarding liabilities, the report indicates that total deposits held by traditional commercial banks increased by 3.4 percent, reaching OMR 22.2 billion by July 2023.

Among these deposits, government deposits in commercial banks saw a 7 percent increase, reaching around OMR 5.3 billion.

In contrast, deposits from public sector institutions decreased by 9.7 percent, amounting to approximately OMR1.6 billion during the same period.

Private sector deposits, on the other hand, grew by 4.2 percent, totaling OMR 14.9 billion in July 2023, constituting 67 percent of the total deposits with traditional commercial banks.

Oman’s banks have been lending more money to people and businesses, which is good. They gave out 5.3 percent more money as loans, reaching a total of OMR 20.2 billion by July 2023.
But they have been a bit careful with where they put their own money. They reduced the amount of money they invested in certain things by 4.6 percent, which is about OMR 4.4 billion.

They didn’t want to invest as much in government bonds (GDBs), which are like IOUs from the government. That went down by 10.4 percent to OMR 1.9 billion. But they put more money into foreign investments, which grew a lot, up to OMR 1.2 billion.

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People also put more money into these banks. The total money that people put in increased by 3.4 percent, reaching OMR 22.2 billion by July 2023.

The government also put more money in, up by 7 percent to about OMR 5.3 billion. But some public institutions put less money, down by 9.7 percent to OMR 1.6 billion.