Muscat – Total outstanding credit extended by Oman’s banking sector grew by 8.0% year-on-year to reach RO34.5bn at the end of September 2025, while banking sector deposits rose by 4.7% over the same period, according to the latest data released by the Central Bank of Oman (CBO).

Of the total, credit to the private sector increased by 5.7% year-on-year to RO28.2bn. Within the private sector, non-financial corporations accounted for the largest share at 46.7%, followed by households at 44.7%. Financial corporations represented 5.8%, while other sectors made up the remaining 2.8%.

Growth in overall lending was supported by both conventional banks and Islamic banking entities. The combined balance-sheet of conventional banks recorded a 7.3% year-on-year increase in total outstanding credit as of end-September 2025.

Credit to the private sector by conventional banks rose by 4.2% to RO21.5bn, while their total investments in securities grew by 15.4% to RO6.5bn. Investment in government development bonds climbed 5.7% to RO2.0bn, whereas investments in foreign securities surged 21.6% to RO2.6bn.

Meanwhile, Oman’s Islamic banking industry continued to demonstrate robust growth in 2025. Islamic banking entities provided total financing of RO7.4bn at the end of September, up 10.8% compared with a year earlier.

The total assets of Islamic banks and windows rose by 12.2% year-on-year to RO9.2bn, representing about 19.7% of the banking system’s total assets at end-September 2025.

 

Deposits growth led by private sector

According to CBO data, total deposits held with the banking sector increased by 4.7% year-on-year to RO33.1bn at the end of September 2025. Private sector deposits rose by 7.5% to RO22.3bn.

Within private sector deposits, households accounted for 50%, followed by non-financial corporations at 30.5%, financial corporations at 17.3%, and other sectors at 2.2%.

Aggregate deposits with conventional banks grew by 3.2% year-on-year to RO25.8bn at end-September. Government deposits with conventional banks increased by 8.9% to RO5.9bn, while public enterprise deposits declined by 29.3% to RO1.7bn.

Private sector deposits, which accounted for 67.2% of total deposits with conventional banks, rose by 6.9% to RO17.3bn.

Deposits with Islamic banks and windows surged by 10.5% year-on-year to RO7.3bn at the end of September 2025.

 

Interest rates continue to soften

The weighted average interest rate on local currency deposits with conventional banks fell from 2.679% at end-September 2024 to 2.568% a year later. The weighted average lending rate also eased, declining from 5.604% to 5.479% over the same period, the CBO data showed.

The overnight Omani rial domestic interbank lending rate dropped to 3.815% in September 2025 from 4.896% a year earlier.

According to the CBO, the easing of interest rates reflected a reduction in its average repo rate for liquidity injection, which declined to 4.892% in September 2025 from 5.790% a year earlier, in line with the US Federal Reserve’s policy rate adjustments.

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