14 October 2015
Muscat: Oman's commercial banks have achieved a robust 10.6 per cent growth in total credit at OMR18.01 billion for the first eight months of 2015, from OMR16.28 billion for the same period last year, according to the Central Bank of Oman.
The incremental credit growth of all banks in absolute terms was OMR1,725.9 million in a year. It is more or less in line with the loan growth seen last year and was mostly driven by both corporate and retails segments.
"Credit growth remained strong in the first three quarters, which was above market expectation," said Kanaga Sundar, head of research at Gulf Baader Capital Markets. There has been a strong demand for credit from both segments -- corporate and retail, he added.
The demand for credit from the corporate sector is mostly for funding projects, which are either state-owned entities like Oman Oil Refineries and Petroleum Industries Company (Orpic) or semi-government firms, he explained.
Orpic is implementing three major capital intensive projects -- Sohar Refinery expansion, Liwa Plastics Project and a 230-km-long pipeline between Muscat and Sohar.
Hamoud Sangour Al Zadjali, executive president of Central Bank of Oman (CBO) earlier said that the credit growth for the whole year would be in double digits and would probably hover around 10 per cent.
The pipeline of credit is still strong, which will continue for another two more quarters since local banks are also actively participating in syndicated loan facilities for project funding.
Total deposits of Omani banks also rose by 5.78 per cent for the first eight months of 2015 at OMR18.24 billion, from OMR17.25 billion for the same period last year, according to monthly statistics released by the apex bank.
"Deposit mobilisation of banks showed a slowdown," added Sundar.
Oman has seven conventional banks -- Bank Muscat, National Bank of Oman, BankDhofar, HSBC Bank Oman, Bank Sohar, Oman Arab Bank and ahlibank.
Because of continued slackness in oil prices, the banks will be more conservative in lending in the second half and focus more on the credit quality rather than quantity.
The recent sukuk issue and development bond issues of the government is expected to absorb sizable liquidity of banking system.
If government continues borrowing, bank liquidity will be tightened and the lending rates will not remain at the same level.
In the last couple of years, Omani banks had ample liquidity, resulting in a low interest regime.
Total assets of commercial banks by end-August 2015 touched OMR27.87 billion, showing a growth of 14.73 per cent over the same period last year.
Muscat: Oman's commercial banks have achieved a robust 10.6 per cent growth in total credit at OMR18.01 billion for the first eight months of 2015, from OMR16.28 billion for the same period last year, according to the Central Bank of Oman.
The incremental credit growth of all banks in absolute terms was OMR1,725.9 million in a year. It is more or less in line with the loan growth seen last year and was mostly driven by both corporate and retails segments.
"Credit growth remained strong in the first three quarters, which was above market expectation," said Kanaga Sundar, head of research at Gulf Baader Capital Markets. There has been a strong demand for credit from both segments -- corporate and retail, he added.
The demand for credit from the corporate sector is mostly for funding projects, which are either state-owned entities like Oman Oil Refineries and Petroleum Industries Company (Orpic) or semi-government firms, he explained.
Orpic is implementing three major capital intensive projects -- Sohar Refinery expansion, Liwa Plastics Project and a 230-km-long pipeline between Muscat and Sohar.
Hamoud Sangour Al Zadjali, executive president of Central Bank of Oman (CBO) earlier said that the credit growth for the whole year would be in double digits and would probably hover around 10 per cent.
The pipeline of credit is still strong, which will continue for another two more quarters since local banks are also actively participating in syndicated loan facilities for project funding.
Total deposits of Omani banks also rose by 5.78 per cent for the first eight months of 2015 at OMR18.24 billion, from OMR17.25 billion for the same period last year, according to monthly statistics released by the apex bank.
"Deposit mobilisation of banks showed a slowdown," added Sundar.
Oman has seven conventional banks -- Bank Muscat, National Bank of Oman, BankDhofar, HSBC Bank Oman, Bank Sohar, Oman Arab Bank and ahlibank.
Because of continued slackness in oil prices, the banks will be more conservative in lending in the second half and focus more on the credit quality rather than quantity.
The recent sukuk issue and development bond issues of the government is expected to absorb sizable liquidity of banking system.
If government continues borrowing, bank liquidity will be tightened and the lending rates will not remain at the same level.
In the last couple of years, Omani banks had ample liquidity, resulting in a low interest regime.
Total assets of commercial banks by end-August 2015 touched OMR27.87 billion, showing a growth of 14.73 per cent over the same period last year.
© Times of Oman 2015
