BankDhofar Financial Performance and Strategic Outlook

5 Omani Banking Sector Overview of the Omani Banking Sector ► The Omani Banking Sector comprises 20 licensed banks, of which: 16 conventional commercial banks: 7 locally incorporated and 9 branches of foreign banks ► 2 state-owned specialised banks: Oman Housing Bank and Oman Development Bank ► 2 full-fledged locally incorporated Islamic banks ➤ The Omani banking sector has been growing consistently in the past decade with banking assets reaching over OMR 39 billion in August 2022. ► OMR 33 billion for conventional banks and OMR 6 billion for Islamic banks Islamic banking sub-sector has been growing considerably in the past years ▸ The banking sector has limited reliance on foreign funding, mainly due to strong domestic deposit base Regulatory Framework set by The Central Bank of Oman ("CBO”) بنك ظفار BankDhofar Several regulatory and supervisory initiatives have been implemented by the CBO to develop a competitive and sound banking system Imposing robust bank capitalization levels ▸ Implementation of Basel III regulation ► Introduction of a Prompt Corrective Action framework (the PCA) in 2005, which makes it mandatory for banks to take corrective actions if their total capital adequacy ratio falls below a certain level Credit quality and provisioning - implementation of IFRS 9 as a more conservative accounting standard for measuring and booking credit related provisions Funding and liquidity - directing Omani banks towards a deposit-based funding and significant liquidity buffers ▸ NSFR (minimum of 100%) and LCR (minimum of 100%): key reforms to maintain a stable funding profile and a sound liquidity level OMR billion Assets, Deposits and Loans of Omani Banks 34 34 23 25 25 36 24 26 26 36 39 28 24 27 26 24 39 26 28 26 2018 2019 ■Total Assets 2020 ■Total Deposits 2021 Q3 2022 Total Loans Source: CBO Monthly Statistical Bulletin August 2022 OMR billion Islamic Banking Assets of Omani Banks CAGR: 7.6% 6.3 5.9 5.2 4.9 4.4 2018 2019 2020 2021 Q3 2022 Source: CBO Monthly Statistical Bulletin August 2022 11

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