Oman’s banking sector showed strong growth in the first half of 2025, with total credit climbing 8.4 percent year-over-year to 34.1 billion Omani rials. This rise, reported by the Central Bank of Oman, highlights increased lending to private businesses and households, supporting the nation’s push for economic diversification under Vision 2040.
The expansion comes amid steady private sector activity, where lending grew 6.6 percent to 28 billion rials. Deposits also advanced, up 7.6 percent to 33 billion rials by June, signaling growing confidence in Oman’s financial stability.
Key Drivers Behind the Credit Surge
Banks in Oman extended more loans to key areas, driven by national goals to reduce oil dependence. Non-financial corporations took the largest share at 45.9 percent of private sector credit, reflecting investments in manufacturing and services.
Households followed closely at 44.2 percent, boosted by home and personal loans. Financial corporations received 6.2 percent, while other sectors got 3.7 percent. This mix shows a balanced approach to funding growth across the economy.
Experts point to lower interest rates and government incentives as factors encouraging borrowing. The Central Bank noted a 7.2 percent increase in conventional banks’ total outstanding credit, reaching new highs.
Deposit Growth and Financial Health
Deposits played a big role in the sector’s strength. Private sector deposits rose 6 percent to 21.9 billion rials, with households leading at 49.4 percent.
Non-financial corporations held 31 percent, financial firms 17.4 percent, and other sectors 2.2 percent. This inflow provides banks with more funds to lend, creating a positive cycle.
The Central Bank’s data also showed investments in securities up 1.3 percent to 5.7 billion rials. Such trends suggest banks are managing risks well while expanding.
Overall, these figures indicate a resilient banking system, even as global uncertainties linger.
Ties to Vision 2040 and Economic Diversification
Oman’s Vision 2040 aims for a diversified economy, and this credit growth aligns directly with that plan. By channeling funds to small and medium enterprises, banks help build non-oil sectors like tourism and logistics.
Recent government reforms, including easier business regulations, have spurred this activity. For instance, new digital banking tools have made loans more accessible, drawing in younger entrepreneurs.
This progress ties into broader regional trends, where Gulf nations invest in sustainable growth. Oman’s efforts mirror those in neighboring countries, focusing on innovation and job creation.
The banking surge also supports infrastructure projects, such as port expansions, which need steady financing.
Profits Soar for Listed Companies
Public companies on the Muscat Stock Exchange reported a 14.1 percent profit increase in the first half of 2025, totaling 757.2 million rials. This marks a jump from 663.3 million rials the previous year.
Seventy-six firms posted gains, while seventeen recorded losses of 8.6 million rials combined. The financial sector led with a 25.7 percent profit rise to 345.1 million rials, driven by banking earnings of 275.9 million rials.
Here are some top performers:
- OQ Exploration and Production: 166 million rials
- Bank Muscat: 125.8 million rials
- Sohar International Bank: 46.2 million rials
- Omantel: Strong showing in telecom
- National Bank of Oman: Key contributor
Insurers like Liva Group and Takaful Oman turned profitable, adding to the positive outlook.
Sector Breakdown and Future Outlook
The services sector saw energy and water firms’ profits jump 46.3 percent to 73.6 million rials. Oil marketers earned 9.6 million rials, showing resilience in energy-related areas.
Telecom profits dipped slightly to 38.7 million rials due to competitive pressures on domestic earnings. Industrial sectors faced mixed results, with some like Raysut Cement posting losses.
Looking ahead, analysts expect continued growth if oil prices stabilize and diversification efforts accelerate. The table below summarizes key banking metrics for the first half of 2025:
| Metric | Value (in billion Omani rials) | Year-over-Year Growth (%) |
|---|---|---|
| Total Credit | 34.1 | 8.4 |
| Private Sector Lending | 28 | 6.6 |
| Total Deposits | 33 | 7.6 |
| Private Sector Deposits | 21.9 | 6.0 |
| Investments in Securities | 5.7 | 1.3 |
These numbers underscore a healthy trajectory for Oman’s economy.
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