Aug 06 2012
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Oman bank lending rises 20% in H1
Net loans and advances of HSBC Bank Oman stood at RO1.21bnin the first half of this year against RO484mn a year ago. Of this rise,RO685mn was a result of the merger of OIB and HSBC Oman and has not beenincluded in the figures for this year.
According to analysts the growth in bank credit was largelysupported by higher government spending which created demand for project-basedloans in the corporate segment. Lo'ai Badie Bataineh, DGM of investment anddevelopment at Oman Arab Bank, said that most of the major projects
He said, "Growth has largely been supported by loans tocorporates and government entities. However, credit growth will be less in thesecond half due to new regulations on retail lending and tough competition forproject financing as the tendering activity is likely to slow down." "Followingthe new regulation on retail loans, retail portfolios of banks will decline andmargins will remain under pressure. Banks are eager to participate ininfrastructure projects and they will continue to focus more and more oncorporate loans," added Bataineh.
The good thing is that the growth in lending is supported bya similar growth in deposits." "We cannot be sure whether the 20 per centgrowth level will be maintained or not going forward, but the Oman economy isbuoyant and banks will continue to support this environment," addedSacciavillani.
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