Oman, 28 November, 2024 : Oman’s Islamic finance industry is expected to exceed $40 billion in the medium term, with assets reaching $30.9 billion by the end of September 2024, according to Fitch Ratings. Islamic banking accounts for over two-thirds of the sector, followed by sukuk (30%) and takaful contributions (1%).
Growth is driven by rising public demand, expanding distribution channels, and the use of sukuk as a funding tool. Regulatory measures, such as the Central Bank of Oman’s (CBO) Bank Deposit Protection Law introduced in October 2024, are expected to boost confidence by covering Islamic bank deposits for the first time.
Islamic banking assets reached OMR8.2 billion ($21.3 billion) by 3Q24, capturing an 18.7% market share of Oman’s banking sector. Islamic financing growth (12.6% year-on-year) outpaced conventional banks (3.2%), supported by favourable economic conditions, improved asset quality, and stable profitability.
Sukuk issuance surged 86% year-on-year to $2 billion in the first nine months of 2024, comprising 21% of Oman’s $45 billion debt capital market. Recent regulatory initiatives, including climate risk circulars and a sustainable finance framework, are expected to strengthen the sector’s development.
Challenges remain, such as limited liquidity-management tools and smaller capital bases compared to conventional banks. However, with regulatory progress and a predominantly Muslim population, Oman’s Islamic finance sector holds long-term growth potential.
Source : www.zawya.com
