Oman’s Islamic banking could achieve 17% of total banking assets in 5 years

Monday 31 Aug 2015 - 12:49 Makkah mean time-16-11-1436

Bank Nizwa (Image from Times of Oman)

Muscat, Oman (IINA) - Islamic banking in Oman could achieve around 15 to 17 percent of the total banking assets within the next five years in normal market conditions with recovery and stability in the oil market, Times of Oman reported citing an official banker.
Speaking to the Times of Oman, Dr Jamil El Jaroudi, chief executive officer of Bank Nizwa, said, “It is difficult to estimate the share of Oman’s Islamic banking operations at this juncture due to the volatility in oil prices, which is affecting the country’s growth.”
According to the Central Bank of Oman, the combined assets of Islamic banks and window operations surged ahead by 64.08 percent to OMR1,832.6 million by end-June 2015, from OMR1,116.9 million for the same period last year, while conventional banks’ total assets moved up by 11.22 percent to OMR27,391.9 million, over the same period of 2014.
“This is an important variable that would determine the nature of the competition for the banking sector going forward,” El Jaroudi noted.
However, assuming a normal market condition and recovery with some stability in the oil price, it is fair to assume that Islamic banking could achieve a level of around 15 to 17 percent of the total banking asset within the next five years, he added.
“This level would be similar to the other markets in the region including the UAE and Bahrain,” said the CEO of Bank Nizwa.
Commenting on the performance of Islamic banking in Oman, El Jaroudi said, “If you look at the industry reports, both fully-fledged Islamic banks in Oman and Islamic windows combined saw an average growth rate of over 40 percent year-on-year, in terms of total assets.”
The average growth for conventional banks on the other hand was around nine per cent for the same period, he added.
“In terms of financing portfolio growth, it is even more remarkable, as we have grown by more than 300 percent on an average during the same period, compared to the conventional banks’ average of approximately 15 percent,” the official noted.
He added that these figures are in line with the other countries in the region, which are experiencing the same challenges in growing their Islamic banking industries.
SM/IINA
 

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