From the editor’s desk
Published: 23/08/2017 12:00 pm
The economic troubles of 2016 has had an impact on every sector in the country. According to the 2016 annual report by the Central Bank of Oman, the country's nominal GDP contracted by 5.1 per cent in 2016, on top of a drop of 13.8 per cent in 2015, due to weakening of both external and domestic demand. Total government revenue declined by 16.1 per cent to RO7.6bn in 2016 due to a substantial fall in oil revenues, which declined sharply by 35.4 per cent to RO 3.65bn in 2016, mainly reflecting a steep decline in oil prices.
This year's Best Banks and NBFCs results show that the financial sector was not immune to market realities. But given the circumstances, banks and NBFCs managed to be resilient and produced decent results. Only HSBC Bank Oman managed to deliver double digit growth in net profits in 2016. Three banks saw their profits go down. Another worrying aspect was the rise in non-performing loans and slowing growth in customer deposits. Bank Muscat has reclaimed the first rank, while National Bank of Oman, which held that position for two consecutive years have come fourth.
The NBFC sector also saw some shake-ups. The biggest upset came in the form of the last ranking of Al Omaniya Financial Services. National Finance Co retained the first rank followed by Oman Orix Leasing, similar to the 2015 survey. Interestingly, National Finance has acquired Oman Orix, which will reshape the NBFC sector in the coming years.
In other stories we have an article on the performance of the Islamic finance sector in Oman. Fintech is the buzzword now in the finance world and we have two articles on the topic, one focusing on its influence in Islamic banking.