Banking

High capital adequacy and profitability define the banking sector in Oman. Aggregate net profits from local banks and foreign branches rose 15.6% in 2012 to $786.1m, up from $683.8m in 2011 with local banks accounting for 96.1% of the total. Consumer spending is driving lending markets as the wealth of the population increases, and banks are looking to meet this demand. New support for SMEs, an important part of the drive to diversify the economy away from hydrocarbons, should help change banks’ portfolios. Demand for Islamic services has led to the creation of a new segment, with the two newest entrants into the banking sector being Islamic institutions, whose licences were granted after the 2011 decision to allow sharia-compliant financial institutions to operate in the sultanate. This chapter contains an interview with Hamood Al Zadjali, Executive President, Central Bank of Oman.