Oman’s Islamic banking sector is now world’s 15th largest

STRONG GROWTH: Islamic banking enjoys a 13.4 per cent share of the combined banking industry (conventional and sharia-compliant banking) as of June this year.

In the space of a mere seven years, the Sultanate’s Islamic banking sector has witnessed rapid growth to become the world’s 15th largest to date, according to a top official of the Central Bank of Oman (CBO).

Dr Qais Issa Mohammed al Yahyaei (pictured), Executive Vice-president, said Islamic banking accounts 13.4 per cent of the combined banking industry (conventional and shariacompliant banking) as of June this year. In value terms, this equates to RO 4.6 billion (approximately $12 billion) in assets, he noted.

Delivering the keynote address at an Islamic Finance Conference organised by the Oman-french Friendship Association (OFA) at Fraser Suites here on Wednesday, Dr Al Yahyaei said the Islamic banking industry now comprises two full-fledged Islamic banks and six Islamic banking windows, which offer a full suite of saving, financing and investment products and services to government, businesses and consumers.

“Similarly, the profitability of Islamic banking sector in Oman has considerably improved during 2018, with a total profit of over RO 34 million, which shows an impressive growth of over 76 per cent from the previous year. All these achievements have already made the Islamic banking sector in Oman among the 15th largest in the world,” he stated.

Rivalling this strong uptrend in Islamic banking is the growth of the

Takaful and Islamic capital market sectors, according to the official. “Based by several legal and regulatory initiatives for these sectors — including issuance of news laws and regulations — currently three Islamic funds and two takaful companies are operating in the Sultanate. Similarly, a Sharia Index at the Muscat Securities Market with over 30 Sharia compliant companies have been launched. Moreover, four sovereign sukuk and five corporate Sukuk have been issued so far, with a variety of structures and currencies,” he noted.

In his address, the Executive Vicepresident said the Sultanate was endowed with all of the “ingredients” necessary to support the growth of a thriving domestic ‘Islamic economy’. He cited in this regard Oman’s “educated and energised youth, high quality infrastructure and business friendly policies”.

The profitability of Islamic banking sector in Oman has considerably improved during 2018, with a total profit of over RO 34 million, which shows an impressive growth of over 76 per cent from the previous year.