Banking continues to be a key pillar of Oman’s financial sector, responsible for the majority of credit for individuals and institutions – both government-owned enterprises and the private sector. Recent years have seen credit and deposit expansion, with these growing along with banking services and the overall economy. The sector faces the challenges of enabling continued bottom-line growth while also tackling long-standing issues over expenditure.
The adoption of more financial technology (fintech) and greater consolidation are both helping with this, as are the sultanate’s overall development plans, with banking remaining a major force in Oman’s diversification strategy. In addition to its banking sector, Oman’s financial services include a growing insurance industry and a rapidly developing capital market. Recent times have seen the sultanate’s insurance sector maintain its growth trajectory, with higher revenue and profits, while the Muscat Stock Exchange (MSX) is now advancing via a number of major programmes aimed at deepening and widening its securities, bonds and sukuk (sharia-compliant bonds) markets.
These moves are also in tandem with the rollout of a new regulatory framework and supervisory body for the sector. Giving dedicated support to insurance and capital markets, the establishment of the Financial Services Authority (FSA) in 2024 heralds a new level of maturity for the sector. This dovetails with national plans for economic development that stress the key role of financial services in the economy’s diversification. Insurance and finance contributed 5.8% of GDP in Q1 2024, a figure up 5.6%, year-on-year. This expansion is also widely expected to continue in the years ahead.
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