RIYADH: Oman’s Islamic banking sector witnessed a 12.6 percent year-on-year surge in total assets reaching 7 billion Omani rials ($18.25 billion), data issued by the country’s central bank showed.
This figure accounts for approximately 17.2 percent of the Gulf Cooperation Council country’s overall banking system assets as of the end of June 2023.
The data revealed that Islamic banking entities extended financing amounting to 5.8 billion rials by June 2023, marking a 12.8 percent growth compared to the previous year. Additionally, total deposits held with Islamic banks and windows rose by 10.5 percent, reaching 5.2 billion rials.
In its banking and monetary developments report for June 2023, the central bank disclosed that the broad money supply, or M2, marginally increased by 2.8 percent, totaling 21.4 billion rials.
Despite a 4.8 percent dip in narrow money, M1, the expansion of M2 supply was attributed to a 5.9 percent uptick in non-cash assets.
The central bank data also indicated that during the same period, components of M1 exhibited varying trends. Currency with the public rose by 2.5 percent, while demand deposits in Omani rial experienced a decline of 6.9 percent.
In economic terms, M2 refers to the total amount of money, including physical currency, bank deposits, savings accounts, and other forms of easily accessible cash in circulation within an economy.
On the other hand, M1 is a more specific subset of money supply that includes only the most liquid and readily accessible forms of money — physical currency and coins, along with demand deposits. These are the funds available in checking accounts that can be withdrawn immediately.
The M2 and M1 numbers are general indicators of the overall money supply in the economy.
The report also revealed that the total outstanding credit balance granted by conventional commercial banks had shown a year-on-year growth of 5.1 percent, adding that credit to the private sector increased 5.4 percent to reach 20.2 billion rials. In comparison, their overall investments in securities declined 5.9 percent to 4.6 billion rials at the end of June 2023.
The bank added that investment in government development bonds marginally decreased by 5.1 percent to reach 2.1 billion rials. In comparison, foreign securities surged 90.8 percent to hit 1.3 billion rials at the end of June 2023.