Financial stability remains strong: Central Bank of Oman

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Muscat – Central Bank of Oman (CBO) has released its Financial Stability Report 2024, highlighting the country’s robust financial system despite global challenges such as geopolitical tensions and tightened monetary policies.

The report noted that while global inflation and economic uncertainties persist, Oman’s financial sector has shown resilience, supported by high oil prices and fiscal discipline. The banking sector has reported strong earnings, solid capital positions, ample liquidity, and low non-performing loans.

The Systemic Risk Survey conducted in January 2024 indicated strong confidence in Oman’s financial stability. Specialised banks and foreign commercial banks were viewed as the most robust, while insurance companies and capital market institutions were seen as more vulnerable. Positive rating reviews from leading agencies since late 2021 underscore international confidence in Oman’s economic prospects.

The Composite Financial Stability Indicator showed sustained stability in 2023, driven by improvements in debt sustainability and banking stability. The banking sector continued to expand, maintaining robust earnings and strong capital positions despite two years of tightened monetary policy. Stress tests revealed that banks could withstand various shocks without breaching minimum capital requirements.

The 2023 Credit Conditions Survey indicated rising loan demand across sectors, driven by economic growth and consumer confidence. However, credit availability for corporates tightened with expectations of continued stringent lending standards in 2024.

The CBO remains vigilant about rising cyber threats and climate change impacts. Policies are being crafted to mitigate cyber risks and incorporate climate risks into financial institutions’ risk management frameworks.

In a foreword of the report, Tahir Salim Abdullah al Amri, Executive President of CBO, stated that in the near term, “our assessment indicates that the risks to the outlook for financial stability in Oman remain low and the Omani banking system is well-poised to leverage its strength to support businesses and households in the event of any unforeseen shocks”.

The CBO remains unwavering in its determination to safeguard financial stability, he added. “We will continue to meticulously take stock of global and domestic developments and adopt international best practices ensuring that our financial system remains resilient and fully capable of supporting the economic growth and prosperity of our nation.”