Banking
From The Report: Oman 2014
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High capital adequacy and profitability define the banking sector in Oman. Aggregate net profits from local banks and foreign branches rose 15.6% in 2012 to $786.1m, up from $683.8m in 2011 with local banks accounting for 96.1% of the total. Consumer spending is driving lending markets as the wealth of the population increases, and banks are looking to meet this demand. New support for SMEs, an important part of the drive to diversify the economy away from hydrocarbons, should help change banks’ portfolios. Demand for Islamic services has led to the creation of a new segment, with the two newest entrants into the banking sector being Islamic institutions, whose licences were granted after the 2011 decision to allow sharia-compliant financial institutions to operate in the sultanate.
This chapter contains an interview with Hamood Al Zadjali, Executive President, Central Bank of Oman.

Articles from this Chapter

Overview

Branching out: Islamic segment added to the already profitable and growing sector
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With a stable banking sector, the Sultanate of Oman has good access to capital and a high-quality asset base. Banks’ loan portfolios in particular are considered at minimal risk of default in a global context. In addition to the banks, the country has a vibrant group of non-bank lenders and an Islamic banking segment that is just getting started. Overall, the sector is expected to serve as a key catalyst for an economic shift under way in the sultanate. The government’s long-term vision includes…

Interview

OBG talks to Hamood Al Zadjali, Executive President, Central Bank of Oman (CBO)
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Interview:Hamood Al Zadjali What regulations have been formulated to mitigate the underlying risk profile of exposures, such as bank lending to non-resident entities? HAMOOD AL ZADJALI: To reduce risks related to the banks’ overseas activities, certain prudential limits have been put on non-resident lending and the placement of funds abroad. The limits are reviewed from time to time based on domestic and global developments. There are certain overall exposure limitations placed on banks.…

Analysis

Borrowing for basics: Lending is on the rise as the minimum wage and employment increase
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Recent regulatory changes aimed at Oman’s banking sector are likely to cause significant shifts in the lending market in 2014, with potential impacts including increased credit access for small and medium-sized enterprises (SMEs) and perhaps a broader jump in the pace of loan growth and the competitiveness of the lending market. The changes are aimed at further aligning lending with overall macroeconomic goals. Oman wants to diversify its economy and create employment opportunities for its local…