| 04 Jul 2009 |
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Domestic liquidity shields Oman
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MUSCAT -- The banking sector in Oman has been shielded from the adverse effects of the global slowdown and continues its resilience by drawing support from the expansionary fiscal policy and supportive domestic liquidity conditions.
The combined balance sheet of commercial banks continued to register growth in assets/liabilities at the end of May 2009.
On a year-on-year basis, total assets increased by 15.4 per cent in May 2009 to reach RO13,740.5 million in comparison to its level a year ago driven by growth in credit of 23.6 per cent. Credit stood at RO9,523.7 million as at end of May 2009 compared to RO7,705.9 million at end of May 2008.
Relevant
It may, however, be relevant to note that the pace of credit growth has been slowing down in the current year from 38.4 per cent annual growth in January 2009 to 29.7 per cent in March 2009 and 23.6 per cent in May 2009.
Investments in securities (both domestic and foreign), which accounted for 11 per cent of total assets in May 2009, increased by 14.3 per cent to RO1,518 million in comparison to its level in May 2008.
Commercial banks' outstanding investments in CDs issued by CBO increased from RO968 million as at the end of May 2008 to RO1,032 million at the end of May 2009. Investments in foreign securities also increased from RO142.6 million to RO234.5 million during the same period. Assets held in cash and deposits with CBO stood at RO857.9 million at the end of May 2009, which was significantly higher than required reserves to be held with CBO, indicative of excess liquidity with commercial banks at the short end of the market.
On liabilities side, commercial banks aggregate deposits (Rial Omani plus foreign currency) increased by 14.4 per cent to RO8,676.1 million at the end of May 2009.
Deposits
Government deposits rose by 37.4 per cent to RO1,651 million, representing 19 per cent of total deposits, whereas public enterprises' deposits increased by RO296.4 million to RO580.7 million, and private sector deposits increased by 5.6 per cent to reach RO6,444.4 million, representing 74.3 percent of total deposits.
Just as in the case of credit, growth in aggregate deposits held with commercial banks has been declining at a progressive rate during 2009. On a year on year basis, annual growth in total deposits moderated from 27 per cent in January 2009 to 19 per cent in March 2009 and 14.4 per cent in May 2009.
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