Banking & Islamic Finance
From The Report: Oman 2013
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Backed up by strong macroeconomic fundamentals and the sultanate’s reputation for stability and sound financial management, Oman’s banking sector has been remarkably resilient in recent years. The sector has registered good growth in the face of market volatility linked to the Arab Spring and the eurozone crisis. Going forward, banks are now entering a period of substantial change. In 2013, Islamic banks will enter the field for the first time, bringing heightened competition for deposits and loans, while also bringing wider choice for Omani individuals and businesses. Indeed, with competition set to increase, conventional banks are now focusing on expanding into Islamic banking, opening dedicated branches for sharia-compliant financial services. This is set to bring a wider range of products and services within the sector.

This chapter includes an interview with Hamood bin Sangour bin Hashim Al Zadjali, Executive President of the Central Bank of Oman (CBO).

Articles from this Chapter

Overview

An eye on fundamentals: Solid growth in the conventional segment and the introduction of Islamic financial services bode well for the sector
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Backed up by strong macroeconomic fundamentals and the sultanate’s reputation for stability and sound financial management, Oman’s banking sector is now starting a period of substantial change. In 2012-13, Islamic banks will enter the field for the first time, bringing heightened competition for deposits and loans, while also bringing wider choice for Omani individuals and businesses. Meanwhile, financing a programme of major government-backed infrastructure projects will keep bankers busy for…

Interview

Product diversification: OBG talks to Hamood bin Sangour bin Hashim Al Zadjali, Executive President, Central Bank of Oman (CBO)
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Interview: Hamood bin Sangour bin Hashim Al Zadjali To what extent is the sultanate’s inflation imported, and how is policy being tailored to address this? HAMOOD BIN SANGOUR BIN HASIMAL ZADJALI: The CBO and the government closely monitor the price situation in both domestic and international markets so as to take timely action as and when required without jeopardising the growth of the economy. The eighth five-year development plan for 2011-15 strives to realise low inflation rates throughout…

Analysis

Facing the risks: The central bank is seeking to keep personal debt in check as the appetite for credit grows
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With the Omani appetite for credit showing some substantial increases in 2011 and early 2012, the Central Bank of Oman (CBO) introduced some important measures to ensure this loan growth stayed within sustainable limits. The results have been good thus far, even if they have obliged banks to adjust and required banking equities to stabilise. The CBO Annual Report for 2011 showed that while total credit had grown 16.7% that year, lending to individuals had risen some 17.3% year-on-year, from OR4.28bn…

Analysis

Lending a hand: Greater competition brings a wider range of products and services
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Recent changes in the sultanate’s banking landscape have increased competition for loans, with banks now also switching some of their emphasis from retail to corporate. These moves come ahead of an expected acceleration in competition overall, as Islamic banks and banking windows enter the market operationally in late 2012-13, and a range of major government-backed projects begin looking for financing. This brings benefits for Omani bank customers via a narrowing of interest rate spreads, while…

Analysis

New frontiers: The arrival of Islamic financial services is changing the sector’s landscape
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One of the most significant recent developments in Oman’s banking sector has been the arrival of Islamic banking, bonds and insurance – some rapidly growing global industries that were previously non-existent within the sultanate. The development of the Islamic financial services sector has been welcomed by many Omanis, while also giving impetus to capital markets and interbank competition. In the meantime, the move has opened up great potential for those able to deliver sharia-compliant investment…