Dubai: Islamic banking in Oman is growing at a faster rate than conventional banking segment, with Islamic banking assets up more than 62 per cent year on year, according to a recent report issued by the Central Bank of Oman (CBO).
Total assets held by Islamic banks and the Islamic banking windows of conventional lenders in February 2017 amounted to 3.27 billion Omani riyals (Dh31.2 billion), compared to 2.43 billion riyals a year earlier. This took the Islamic banking’s market share from 5.1 per cent of the banking system’s overall assets in 2015 to 10.8 per cent by February 2017.
“We expect both Bank Nizwa (BKNZ) and 14 per cent Alizz Islamic Bank (BKIZ) to curtail any upward pressure on their costs in a tight operating environment, especially now that their initial investments in infrastructure an human resource development appear to be over,” said Hettish Karmani, Head of Research of U Capital.
Analysts expect these banks to be able to sequentially bring their operating cost-to-income ratio down to the likes of other Omani banks to about 40 per cent, resulting in operating profits to increase at a compounded annual growth rate (CAGR) of 10 per cent for BKNZ and 14 per cent ABKIZ during the forecast period (2017-2021).
Originally published on www.gulfnews.com