Investor Presentaiton
The Oman Banking Sector
OVERVIEW
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Oman's Banking sector risk is assessed to be "BB" by Fitch which is underpinned by the sector's
strong capitalization.
USD billion
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Aggregate deposits for the banking sector in 2022 showed a YoY growth of 0.3%. The loans for
the same period grew by 4.5% YoY.
However, the Omani banking system is fairly concentrated with top four banks (NBO included)
accounting for nearly three fourth of total credit and banking profits.
Although the banking assets have shown 2.6% CAGR over last 5 years, several banking
profitability metrics have been trending lower than pre-pandemic levels.
There has been an improvement in the above situation with most banks showing better
profitability and asset quality metrics since 2020.
CBO a strict but supportive regulator has introduced various regulation to support banks as well
as borrowers.
البنك الوطني العماني
NBO50
MAJOR BANKS ASSETS AND LOANS GROWN
4.30%
4.25%
4.47%
4.39%
Since 1973
4.54%
87.1
64.6
93.4
67.2
93.5
70.6
94.3
68.3
98.6
73.1
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Given the contraction experienced and anticipated in the economy, consolidation is likely over
the medium term.
2020
2021
2022
H1'22
H1'23
Assets
Loans
NPL ratio
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Rating outlook - Banking sector
The rating agency has changed outlook for the Omani banking system to stable from negative.
The rating outlook is a balance of supportive operating conditions with tighter funding and
weaker asset quality.
As per the report expect economic growth to accelerate to 4% in 2022, fuelled by a boost in oil
production, before slowing to 2.4% in 2023.
Loan growth will likely accelerate slightly as the economy recovers and strengthening business
and consumer confidence increases demand for credit.
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47.59%
47.46%
KEY RATIOS OF MAJOR BANKS
44.67%
43.80%
42.08%
8.19%
7.32%
6.38%
7.36%
5.42%
Profitability will remain steady and the banks will maintain solid capital buffers. Deposit growth
will continue to lag loan demand, keeping funding flows relatively tight. Overreliance on
government deposits remains a key risk for the banks.
2.88%
2.75%
2.71%
Oman banking sector has ample liquid resources, however, which are adequate to cover their
market funding exposure.
0.82%
1.13%
0.97%
2.94%
1.28%
2020
2021
2022
H1'22
H1'23
Cost to Income
Return on Equity
Return on Assets
Net Interest Margin (NIM)
2.78%
1.12%
Source: Published FS of eight listed Omani banks including NBO
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