Total deposits held in Oman's banks reach OMR24.9 billion

Muscat: The total deposits held with other depository corporations (ODCs) registered a year-on-year (Y-o-Y) growth of 4.1 per cent to reach OMR24.9 billion at the end of April 2021, data issued by the Central Bank of Oman (CBO) shows.

Total private sector deposits increased by 6.8 per cent to OMR17.3 billion, the CBO said in a statement.

The nominal gross domestic product (GDP), as per the preliminary data released by National Centre for Statistics and Information (NCSI), showed a decline of 15.3 per cent during the fourth quarter of 2020 over the same period of 2019.

The contraction was driven by a decline in output of both the hydrocarbon sector by 23.4 per cent and the non-hydrocarbon sector by 10.5 per cent. The Omani oil average price during April 2021 at $52.4 per barrel was lower by 15.5 per cent than that in April 2020. The average daily oil production at 952,800 barrels during April 2021 is a decline of 7 per cent.

The Sultanate's Consumer Price Index (CPI) showed a year-on-year deflation of 0.4 per cent during April 2021.

The ODCs consist of conventional and Islamic banks in Oman.

The total outstanding credit extended by ODCs grew by 3.0 per cent to OMR27.2 billion at the end of April 2021, while credit to the private sector demonstrated a relatively moderate growth of 1.2 per cent year-on-year to reach OMR23.3 billion.

The shares of the non-financial corporate sector and the household sector (mainly under personal loans) in the total private sector credit stood at 46.7 per cent and 45.1 per cent, respectively, at end-April 2021. The share of financial corporations was 4.8 per cent and other sectors received the remaining 3.4 per cent of the total private sector credit as of end-April 2021.

In terms of the sector-wise composition of private sector deposits, the share of households deposits stood at 50.9 per cent, followed by non-financial corporations at 32.4 per cent, financial corporations at 14.2 per cent and the other sectors at 2.5 per cent.

The combined balance sheet of conventional banks showed year-on-year growth of 1.5 per cent in total outstanding credit as of end-April 2021.

Credit to the private sector declined by 0.4 per cent to reach OMR19.1 billion while their overall investments in securities went up by 40.6 per cent to OMR4.8 billion by end-April 2021.

Investment in Government Development Bonds (GDBs) increased by 27.3 per cent compared to the same period last year to OMR2.2 billion while their investments in foreign securities declined by 9.9 per cent to OMR0.88 billion at the end of April 2021.
Aggregate deposits held with the conventional banks increased by 2.3 per cent year-on-year to OMR20.9 billion by the end-April 2021.

Government deposits with conventional banks witnessed a decrease of 8.9 per cent at OMR4.4 billion, likewise, deposits of public enterprises declined by 2.2 per cent to OMR1.3 billion. Private sector deposits, which accounted for 70.6 per cent of total deposits with conventional banks, increased by 6.1 per cent as of April 2021 to reach OMR14.7 billion.

Islamic banking entities provided financing of OMR4.5 billion at the end of April 2021, recording a growth of 11.2 per cent over that a year ago. Total deposits held with Islamic banks and windows increased by 14.7 per cent to OMR4.1 billion. The total assets of Islamic Banks and Windows increased by 11.6 per cent on a year-on-year basis to OMR5.5 billion and constituted about 14.6 per cent of the banking system's assets by end-April 2021.

Among the indicators of monetary aggregates, broad money supply M2 by the end-April 2021 grew by 5.8 per cent to reach OMR20 billion. This increase was the outcome of a 4.1 per cent expansion in narrow money (M1) and a 6.6 per cent increase in quasi-money (Rial Omani saving and time deposits, certificates of deposit issued by banks, margin deposits and foreign currency denominated deposits). Likewise, the increase in M1 resulted from the growth of demand deposits by 6.6 per cent, during the same period under discussion.

The weighted average interest rate on RO deposits witnessed a marginal increase from 1.92 per cent by end-April 2020 to 1.97 per cent by end-April 2021, similarly, the weighted average RO lending rate increased from 5.47 per cent to 5.49 per cent over the same period.

Meanwhile, the overnight Rial Omani domestic interbank lending rate fell significantly to 0.394 per cent in April 2021 from 1.83 per cent a year ago, reflecting transmission of policy rate cuts by the CBO in line with the rate cuts by the Federal Reserve.

The average Repo rate for liquidity injection by the CBO by the end-April 2021 remains at 0.5 per cent, the same as last year.