Muscat – Total outstanding credit extended by Oman’s banking sector grew by 8.9% year-on-year to reach RO34.1bn at the end of July 2025, according to the latest statistics released by the Central Bank of Oman (CBO).

Of the total bank lending, credit to the sultanate’s private sector rose by 6.4% year-on-year to RO27.9bn as of July 2025, the CBO said in its monthly statistical bulletin.

Non-financial corporations accounted for the largest share of private sector credit at around 46.6% at end-July 2025, followed by households at 44.8%. Financial corporations made up 5.7%, while other sectors received the remaining 2.9%.

Growth in overall banking sector credit was supported by both conventional banks and Islamic banking entities. The combined balance sheet of conventional banks showed year-on-year growth of 8% in total outstanding credit as of end-July 2025.

Conventional banks’ credit to the private sector increased by 4.6% to RO21.3bn, while their total investments in securities fell by 3.4% to RO5.8bn. Investment in government development bonds declined by 6.3% to RO2bn, while investments in foreign securities dropped sharply by 15.7% to RO2.1bn at the end of July 2025.

Meanwhile, Oman’s Islamic banking industry continued to record robust growth in 2025. Islamic banking entities provided total financing of RO7.2bn at the end of July, up 12.5% compared with a year earlier.

The total assets of Islamic banks and windows grew by 16.8% year-on-year to RO9.1bn, representing about 19.7% of the banking system’s assets at the end of July 2025.

Deposits reach RO32.9bn

The CBO data indicated that total deposits held with the banking sector rose by 6.1% year-on-year to RO32.9bn at the end of July 2025. Private sector deposits increased by 5.8% to RO21.9bn.

By sector, household deposits accounted for 51% of the private sector total, followed by non-financial corporations at 29.4%, financial corporations at 17.6%, and other sectors at 2.3%.

Aggregate deposits with conventional banks grew by 3.6% year-on-year to RO25.7bn at end-July 2025. Government deposits with conventional banks increased by 7.1% to RO5.8bn, while deposits from public enterprises fell by 11% to RO1.7bn. Private sector deposits, which made up 66.3% of total deposits with conventional banks, rose by 4.1% to RO17bn as of July 2025.

Deposits with Islamic banks and windows surged by 16.1% year-on-year to RO7.2bn at end-July 2025.

Interest rates ease

The weighted average interest rate on local currency deposits with conventional banks decreased from 2.705% at end-July 2024 to 2.576% at end-July 2025. The weighted average lending rate also declined, from 5.590% a year earlier to 5.510% in July 2025, the CBO data showed.

Meanwhile, the overnight Omani rial domestic interbank lending rate fell to 4.148% in July 2025 from 5.317% a year earlier.

The CBO attributed the decline in interest rates to a reduction in its average repo rate for liquidity injection, which dropped to 5.00% in July 2025 from 6.00% a year ago, in line with the US Federal Reserve’s policy rate.

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