In 2024, Oman’s banks achieved a 15.2% profit increase, totaling OMR522.6 million ($1.36 billion), driven by economic growth in project financing and loans. Bank Muscat led with profits of OMR225.5 million. The sector, having doubled since 2013, might seek mergers to meet financing demands, while the IMF predicts ongoing GDP growth in Oman.
In 2024, Oman’s banking sector experienced a notable 15.2% increase in profits compared to the previous year, reaching OMR522.6 million (approximately $1.36 billion). This growth is largely attributed to the robust economic conditions facilitated by project financing, home mortgages, and personal loans, as reported by the Central Bank of Oman. Bank Muscat led the sector with the highest profit of OMR225.5 million, reflecting a 6% increase year on year, followed closely by Sohar International Bank and the National Bank of Oman.
The Omani banking landscape has significantly evolved since 2013, more than doubling in size, although challenges such as high loan-to-deposit ratios remain. Experts have suggested that while gains are evident, the sector may need to pursue mergers to effectively meet the government’s financing requirements. Local banks have been active in extending loans to various sectors, including renewable energy, oil and gas, and essential infrastructure projects.
The International Monetary Fund (IMF) projects Oman’s real GDP to continue expanding, with expected growth rates of 3.1% in 2025 and 4.4% in 2026, which may further stimulate the banking sector. Additionally, UAE’s Mashreq Bank has initiated operations in Oman, potentially enhancing competitive dynamics in the market. As a result, Oman’s financial institutions are poised for continued growth amidst an evolving economic landscape, underpinned by strategic financing initiatives.
The banking sector in Oman has witnessed substantial growth in recent years, reflecting a strong economic recovery and an increasing need for financial services. The Central Bank of Oman reported significant rises in profits, indicating robust lending activities. Project financing, particularly in renewable energy and infrastructure, has been a key driver for profitability, highlighting the shift towards sustainable investments and diversification in the economy.
Oman’s banking sector demonstrated a strong performance in 2024, recording a 15.2% rise in profits driven by strategic lending practices. Despite this growth, the industry faces challenges regarding scale and meeting the state’s financing needs. Continued expansion and adaptation, particularly towards sustainable projects, are essential for the sector’s future, with prospects for further mergers to enhance capacity and efficiency.
Original Source: www.agbi.com
