Banking

The Omani banking sector once again posted solid growth in 2013 and the first half of 2014 as steadily growing demand for financial services continues to expand the sector. Government initiatives to boost entrepreneurship and the establishment of small and medium-sized enterprises (SMEs) has resulted in a Central Bank drive requiring local banks to increase lending to SMEs to at least 5% of their loan books by 2015. While this presents a challenge to the sector, the outlook remains positive, with deposits and credit issuance rising. Moreover, the emergence of the sharia-compliant segment presents strong growth potential for local banks. With 3.6% of total banking assets in the sultanate being held by sharia-compliant entities at the end of 2013, the sector, which in September 2014 comprised two Islamic banks and five Islamic “windows” operated by conventional banks, is expected to expand rapidly in the coming years. This chapter contains interviews with Hamood Al Zadjali, Executive President, Central Bank of Oman (CBO); and AbdulRazak Ali Issa, CEO, Bank Muscat.