Oman’s Islamic banking assets jump 9.6%

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Muscat – With continuing robust growth of Oman’s Islamic banking sector, total assets of Islamic banks and windows operating in the sultanate jumped by 9.6 per cent year-on-year to reach at RO6.2bn in June 2022.

Oman’s Islamic banking assets now account for 15.9 per cent of the country’s total banking system assets, according to latest data released by the Central Bank of Oman (CBO).

The sultanate’s Islamic banking entities provided total financing of RO5.1bn till end-June 2022, recording a robust growth of 11.2 per cent over that a year ago, the CBO said in its monthly statistical bulletin.

Total deposits held with Islamic banks and windows also increased by 12.8 per cent to RO4.7bn in June this year compared to the same period a year ago.

Islamic banking sector in the sultanate – which comprises of two fully-fledged Islamic banks and five Islamic banking windows – has continued its double-digit growth despite the adverse economic impact of the COVID-19 pandemic.

Oman’s Islamic banking entities recorded about three-times higher profitability in 2021 from the plunge observed in 2020 due to the COVID-19 pandemic, according to CBO’s latest Financial Stability Report.

During 2021, the Islamic banking sector exhibited pre-tax profit of RO82mn against RO27.4mn a year ago, which improved return-on-assets and return-on-equity of the sector.

The asset quality of the Islamic banking financing portfolio also remained strong with a non-performance financing ratio of 1.9 per cent at the end of December 2021, which is among the lowest in the region, the CBO noted.

The Central Bank of Oman said it is working to introduce a range of Islamic money market instruments to meet the liquidity needs of Islamic banking sector.