Islamic banking assets in Oman rose 10.5% year over year by July 2026. Total assets reached 10.1 billion Omani rials, worth about $26.2 billion. The growth highlights continued expansion across Shariah-compliant financial services. Islamic banks and banking windows also increased financing during the period.
Islamic banking entities provided 8 billion rials in financing by the end of July. That figure represented a 10.9% increase from the previous year. Deposits also grew during the same period. Total deposits reached about 8 billion rials after rising 10.3% year over year. The figures point to stronger activity among Islamic financial institutions in Oman.
Meanwhile, credit growth remained strong across the wider banking sector. Conventional and Islamic banks provided 38.3 billion rials in total credit. That amount represented annual growth of 12.2%. Private sector credit also increased by 11.5% to 31.1 billion rials. Non-financial companies received the largest portion of private sector lending.
Non-financial corporations accounted for about 48.2% of private sector credit. Households followed with a 42.7% share of total private sector lending. Financial corporations received 5.9% of the credit. Other sectors accounted for the remaining 2.6%. Conventional banks also recorded solid growth during the same period.
Conventional banks increased total credit by 12.7% year over year. Their private sector lending climbed 11.9% to 23.8 billion rials. Deposits also expanded across the banking system. Total deposits at other depository institutions reached 37.3 billion rials. That figure marked annual growth of 13.2%.
Private sector deposits increased 12.7% to 24.7 billion rials. Households held the largest share of those deposits at 48.5%. Non-financial corporations followed with 35.2% of private sector deposits. Financial corporations accounted for another 14.6%. At conventional banks, deposits increased 14.6% to 29.3 billion rials.
The broader money supply also recorded significant growth during July. Broad money increased 15% to 29.3 billion rials. Narrow money climbed 28%, while quasi-money increased 9.9%. These movements indicate stronger liquidity across the Omani financial system. Meanwhile, conventional banks increased their securities investments significantly.
Investments in securities by conventional banks rose 26.2% to 7.3 billion rials. Holdings of government development bonds increased 20.4% to 2.5 billion rials. Foreign securities holdings also grew during the period. They increased 30.8% to reach 2.7 billion rials. The figures show broader investment activity among conventional lenders.
Interest rates also moved lower across several parts of the banking market. The weighted average deposit rate declined to 2.19%. It stood at 2.57% during the same period last year. The average lending rate also decreased to 5.31%. It previously stood at 5.51%, showing a gradual easing in borrowing costs.
The overnight interbank lending rate also declined during the year. It fell to 3.48% from 4.14% previously. Meanwhile, the central bank’s average repo rate dropped to 4.25%. The rate previously stood at 5%. These changes followed broader shifts in regional and global interest rate conditions.
Oman’s wider economy also recorded mixed developments during the first quarter. Nominal gross domestic product contracted 2% during the period. The petroleum sector declined 11.7%, which weighed on overall nominal output. However, the non-hydrocarbon economy expanded 5.9%. Real gross domestic product still grew 2.6% during the quarter.
Oil prices also provided support to government and economic activity. Oman’s average oil price reached $83.90 per barrel in July. That represented a 15.7% increase from the previous year. At the same time, Islamic banking continued expanding across financing and deposit activities. The latest figures show its growing role within Oman’s financial system.
