MUSCAT: Oman’s banking sector showcased commendable growth in lending during Q3-2024, reflecting the nation’s economic stability and resilience amidst the broader GCC financial landscape. In a report by Kamco Invest, listed banks in Oman reported a 3.6% quarter-on-quarter (q-o-q) increase in lending, positioning the country as one of the top performers in the region, second only to Saudi Arabia.
This robust growth in the lending sector aligns with the nation’s expanding non-oil economic activities and the steady progress of Oman Vision 2040 initiatives, which aim to diversify the economy. The rise in credit facilities demonstrates the banking sector’s pivotal role in supporting key industries such as real estate, construction, and manufacturing.
Oman’s loan-to-deposit ratio remained healthy at 86.7%, indicating a balanced approach to credit expansion. This figure is slightly lower than Qatar’s 89.1% but higher than the UAE’s more conservative 69.3%. Saudi Arabia continued to lead with a ratio of 92.8%, highlighting potential liquidity challenges for its banking sector amid soaring credit demand.
Oman’s stable loan-to-deposit ratio underpins its banking sector’s capacity to support future credit growth without over-reliance on external funding. This contrasts with Saudi Arabia, where the elevated ratio necessitates increased debt issuance to meet growing credit requirements.
Omani banks also posted a remarkable 16.8% q-o-q growth in non-interest income during Q3-2024, the highest across the GCC. This surge was driven by diversified income streams, underscoring the sector’s resilience amidst rising interest rate environments. In comparison, Saudi and UAE banks recorded growth of 12.4% and 7.5%, respectively, in non-interest income.
Aggregate net interest income for Omani banks grew modestly by 1.2% during the quarter, reflecting a stable interest rate environment. This was in line with broader GCC trends, where net interest income reached record highs due to elevated central bank rates.
Oman’s banking sector performance during Q3-2024 signals a steady trajectory of economic growth and diversification. The robust expansion in credit facilities aligns with the nation’s strategic focus on infrastructure and industrial development.
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