Islamic Banking Assets Cross $26 Billion in Oman Amid 10.5% Growth

Assets held by Islamic banks and Islamic banking windows in Oman rose 10.5 percent year on year to 10.1 billion Omani rials, roughly 26.2 billion dollars, in July, according to figures released by the Central Bank of Oman. Islamic banking entities extended 8 billion rials in financing by the end of July, up 10.9 percent from the same month a year earlier, while total deposits held with Islamic banks and windows increased by 10.3 percent to 8 billion rials, the central bank’s monthly statistical bulletin said.

The growth comes as Gulf Cooperation Council Islamic banks are expected to keep expanding faster than their conventional counterparts, supported by strong demand for Shariah-compliant financing and greater public-sector exposure across retail and corporate portfolios, which in turn supports loan quality, according to Moody’s Ratings.

Credit growth across Oman’s banking sector overall remained strong. Other depository corporations, spanning both conventional and Islamic banks, extended total credit that grew 12.2 percent to 38.3 billion rials, with credit to the private sector rising 11.5 percent to 31.1 billion rials. Non-financial corporations took the largest share of that private sector credit at about 48.2 percent, followed by households at 42.7 percent, financial corporations at 5.9 percent, and other sectors at 2.6 percent. Conventional banks alone saw total credit grow 12.7 percent, with private sector credit rising 11.9 percent to 23.8 billion rials.

On the deposit side, total deposits with other depository corporations grew 13.2 percent to 37.3 billion rials, while private sector deposits rose 12.7 percent to 24.7 billion rials. Households accounted for 48.5 percent of private sector deposits, followed by non-financial corporations at 35.2 percent and financial corporations at 14.6 percent. Conventional bank deposits alone climbed 14.6 percent to 29.3 billion rials, while broad money supply grew 15 percent to the same figure, with narrow money up 28 percent and quasi-money up 9.9 percent.

Conventional banks also increased their securities investments by 26.2 percent to 7.3 billion rials, with holdings of government development bonds up 20.4 percent to 2.5 billion rials and foreign securities holdings up 30.8 percent to 2.7 billion rials.

Interest rates eased over the same period. The weighted average deposit rate at conventional banks fell to 2.19 percent from 2.57 percent a year earlier, while the average lending rate dropped to 5.31 percent from 5.51 percent. The overnight interbank lending rate declined to 3.48 percent from 4.14 percent, and the central bank’s average repo rate fell to 4.25 percent from 5 percent, moving in line with the US Federal Reserve.

On the broader economic backdrop, Oman’s nominal gross domestic product contracted 2 percent in the first quarter of 2026, as the petroleum sector fell 11.7 percent even as the non-hydrocarbon sector expanded 5.9 percent, leaving real GDP growth at 2.6 percent. The average Omani oil price stood at 83.90 dollars a barrel in July, up 15.7 percent from a year earlier.

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