Oman’s banking sector demonstrated solid growth in the first half of 2026, backed by strong lending activity and expanding deposit bases, according to the Central Bank of Oman (CBO). Total outstanding credit rose 12.3% year-on-year to RO38.2 billion by the end of June, while total deposits expanded 13% to reach RO37.3 billion. This double-digit growth highlights active domestic expansion, driven primarily by private sector businesses and retail households.

Private sector credit increased 9.9% year-on-year to RO30.8 billion, with non-financial corporations making up the largest share (48.2%), followed closely by household borrowing (43.2%). Conventional banks saw total credit expand by 12.8%, alongside a 26.2% jump in securities investments to RO7.2 billion—including significant allocations to government development bonds (RO2.5 billion) and foreign securities (RO2.6 billion).

On the liability side, total private sector deposits across all banks grew 11.8% year-on-year to RO24.5 billion, with households contributing 48.1% of the total. Conventional bank deposits rose 14.2% to RO29.4 billion, supported by a 72.3% surge in public enterprise deposits (RO2.6 billion) and a 7% increase in government deposits (RO6.3 billion).

Oman’s Islamic banking segment also expanded, with total assets rising 8.7% year-on-year to RO10 billion—representing 18.9% of the sultanate’s total banking sector assets. Total Sharia-compliant financing grew 10.5% to RO8 billion, while Islamic deposits rose 9.7% to RO7.8 billion.

Concurrently, interest rates across the sultanate eased in response to central bank policy adjustments aligned with US Federal Reserve movements. The CBO lowered its average repo rate from 5.000% in June 2025 to 4.250% in June 2026. Consequently, the weighted average lending rate for conventional banks fell to 5.331% (down from 5.487%), while average rial deposit rates slipped to 2.245% (down from 2.560%), and overnight interbank rates dropped from 4.189% to 3.505%.

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