Islamic banks and window operations in the Sultanate affirmed that there are good opportunities for their growth in 2015 and 2016, thanks to the growing turnout for Sharia-compliant financial products.
The Islamic banks and windows managed to increase the value of the finance provided by them since starting operations early in 2013 up to the end of August 2015 to OMR1.4 billion. At the same period, the deposits and assets increased to OMR1.2 billion and OMR1.9 billion respectively.
This is despite challenges facing the financial institutions this year due to the slump of oil prices and its negative effects on credit and money markets.
Bank Nizwa said that the good results by the banking sector during the first nine months of the year reflect the good performance of the sector. The bank commended the measures taken by the Sultanate to address the marked fall in oil prices namely implementing a strategy that aims at diversifying sources of the national economy and enhancing the role played by the private sector in the socio-economic development process.
At its interim report, the bank added that despite the tough competition, the bank will continue implementing its traditional risk-based management and will remain poised to address any unexpected fluctuations at the market.
It also pointed out that the efforts made by the bank over the past period enabled it to enhance its position at the map of economic growth. It also enabled the bank to enhance its ability to compete with other local banks.
In the past nine months, the Islamic banks and windows focused on implementing more training programmes to enhance employees’ knowledge of the Sharia-compliant financial transactions and spread public awareness about Islamic banking.
The Islamic banking sector sought to diversify the base of revenues to ensure sustainable and stable revenues in the recent past. The Islamic banks and windows have developed plans to maintain the growth of their products and enhance their abilities to finance public and corporate projects.
Al Izz Islamic Bank said that it would continue its investment in information technology infrastructure to develop new products and services that enable customers to enjoy unique banking experience.
The bank said that it has adopted a precautionary approach in dealing with the regional and international economic challenges. The bank will continue managing its core businesses with high efficiency and flexibility and will expand its branches network. The bank will also maintain risks at acceptable levels and achieve sustainable revenues.
The financial indicators of the unaudited financial statements of the Islamic banks and windows during the first nine months of the year are positive. Bank Nizwa managed to reduce its losses to OMR4.2 million compared to OMR5.9 million at the corresponding period last year. Al Izz Islamic Bank losses declined from OMR4.4 million to OMR4.2 million at the same period.
The Islamic windows, on the other hand, posted good profits. Maisarah Islamic Banking Services of BankDhofar achieved good results at the different indicators. ‘Maisarah’ not only did not face any difficulty in finance, but also posted OMR1.9 million profits before taxes for the first nine months of 2015 compared to only OMR10,000 during the same period of last year.
Meethaq Islamic Banking Services of Bank Muscat said that by end-September 2015, its net revenues stood at OMR13.7 million compared to OMR12.4 million during the corresponding period last year; a growth of 10.2 per cent. The revenues from customers increased to OMR549 million compared to OMR231 million a year ago.
Muzn Islamic Banking of National Bank of Oman said that forthe first nine months of 2015, its net profits stood at OMR510,000 against OMR290,000 loss for the same period last year.