Oman’s banking sector posted strong growth in August 2025, with total outstanding credit rising by 8.6% year-on-year to reach RO34.1 billion, according to the latest data released by the Central Bank of Oman (CBO). This expansion reflects sustained lending activity across both conventional and Islamic financial institutions in the Sultanate.
Credit extended to the private sector reached RO28 billion, registering a 6.5% increase compared to the same period in 2024. Among the private sector borrowers, non-financial corporations accounted for the largest share at 46.7%, followed closely by households at 44.7%. Financial corporations represented 5.7% of the total, while other sectors comprised the remaining 2.9%.
Both conventional and Islamic banks contributed to the credit growth. The combined balance sheet of conventional banks showed a 7.3% year-on-year increase in total outstanding credit by the end of August. Lending to the private sector by these banks rose by 4.5% to RO21.4 billion. In addition, conventional banks increased their investments in securities by 3.2%, reaching RO6.1 billion. Notably, investment in government development bonds jumped 12% to RO2.2 billion, while investments in foreign securities declined by 7% to RO2.3 billion.
Meanwhile, Islamic banking entities maintained strong momentum. Total Islamic financing reached RO7.3 billion, reflecting a robust 13.5% year-on-year increase. The total assets of Islamic banks and windows also grew significantly, rising by 15.1% to RO9.1 billion, which represents approximately 19.7% of the entire banking sector’s assets.
On the deposits side, total deposits across the banking sector grew by 7% year-on-year to RO33.3 billion at the end of August 2025. Private sector deposits increased by 7.5% to RO22.4 billion, with households accounting for 50% of that amount. Non-financial corporations contributed 30.6%, financial corporations made up 17.2%, and the remaining 2.2% came from other sectors.
Conventional banks saw their total deposits grow by 5.5% to RO26.1 billion. Within this, government deposits rose by 9.6% to RO5.9 billion, while private sector deposits increased by 6.1% to RO17.5 billion. However, public enterprise deposits declined by 7.8%, totaling RO1.7 billion.
Deposits in the Islamic banking segment also surged, rising by 12.9% year-on-year to reach RO7.2 billion by the end of August.
Interest rates in the Sultanate eased further during this period. The weighted average interest rate on local currency deposits with conventional banks fell to 2.535%, down from 2.704% in August 2024. Similarly, the average lending rate declined slightly from 5.603% to 5.492%.
The overnight interbank lending rate for the Omani rial also decreased, dropping to 4.012% in August 2025 from 5.133% a year earlier. According to the CBO, this downward trend in interest rates is linked to a reduction in its average repo rate used for injecting liquidity, which was lowered to 5.00% from 6.00% over the same period. The change aligns with the US Federal Reserve’s monetary policy adjustments during the year.