Islamic banks achieve robust growth in asset

Muscat: Islamic banks in Oman have provided financing to the extent of OMR3 billion at the end of November 2017 as compared to OMR2.4 billion a year ago, according to the monthly bulletin released by the Central Bank of Oman (CBO). Total deposits held by Islamic banks and windows also registered a significant increase at OMR2.9 billion in November 2017 from OMR2.1 billion as at the end of November 2016. The total assets of Islamic banks and windows combined, amounted to OMR3.7 billion as at the end of November 2017, constituting about 11.9 per cent of the banking system assets. Also, narrow money (M1) registered a year-on-year decline of 1.4 per cent to OMR5 billion. However, quasi-money (rial Omani saving and time deposits, certificates of deposit issued by banks, margin deposits and foreign currency denominated deposits) witnessed a growth of 5.8 per cent during the period. Broad money supply (M1 and quasi-money) stood at OMR16.1 billion as at the end of November 2017, showing a growth of 3.5 per cent during the period. In respect of domestic interest rate structure of conventional banks, the weighted average interest rate of rial Omani deposits increased to 1.677 per cent in November 2017 from 1.443 per cent a year ago while the weighted average rial Omani lending rate increased to 5.215 per cent from 5.081 per cent during the same period. The overnight rial Omani domestic inter-bank lending rate stood at 1.214 per cent in November 2017, up from 0.475 per cent a year ago. The average Repo rate for liquidity injection by the Central Bank of Oman stood at 1.767 per cent per annum during the month of November 2017. The overall hardening of interest rates reflects some tightening of liquidity in the banking system.