Moody’s Upgrades Omani Banks to ‘Positive’ on Stronger Loan Quality and Growth

Oman, 27 February, 2025 :  Moody’s has revised Oman’s banking sector outlook from “stable” to “positive”, citing improving loan quality and stronger economic conditions.

“We expect loan quality to improve as economic growth enhances borrowers’ repayment capacity,” said Francesca Paolino, AVP Analyst at Moody’s. Omani banks are expected to maintain steady profitability, strong capital buffers, and sufficient liquidity to manage market risks.

Oman’s non-oil growth is projected at 3% for 2025-2026, supported by rising business and consumer confidence, tourism growth, and private-sector investments in manufacturing, transportation, and renewable energy. However, reliance on government deposits remains a key risk, though deposit growth is expected to align with loan demand.

Moody’s also noted that the Omani government’s improved debt position and lower debt burden enhance its ability to support banks in times of crisis, reinforcing the positive outlook for the sector.