Saturday 07 / November / 2026
Muscat – Oman's financial system has maintained its resilience and ability to withstand economic shocks despite rising global uncertainty, supported by strong banking sector fundamentals, prudent fiscal policies and improved macroeconomic conditions, according to the Central Bank of Oman's Financial Stability Report 2026.
The report highlighted the banking sector's strong capitalisation, profitability, liquidity and asset quality. Banks maintained a capital adequacy ratio of 18.8 per cent and a liquidity coverage ratio of 195 per cent, while non-performing loans accounted for around 4.4 per cent of total loans.
The sector recorded a return on assets of 1.5 per cent and a return on equity of 10.1 per cent. Stress tests also confirmed banks' ability to absorb adverse economic shocks while maintaining capital and liquidity above regulatory requirements.
The report noted continued improvement in Oman's macroeconomic and financial environment, supported by prudent fiscal management, a stronger external position and improved fiscal sustainability. These developments have contributed to upgrades in the country's sovereign credit ratings by international agencies, strengthening confidence in the national economy.
Oman's composite financial stability index continued to register positive levels, reflecting improved economic conditions, strong banking sector performance and declining systemic risks. A survey of systemic risks also indicated continued confidence among market participants in the stability of the financial system, despite growing awareness of global and domestic challenges.
Islamic banking assets increased by 9.9 per cent, accounting for 19.6 per cent of total banking sector assets, reflecting continued expansion in the segment.
Credit conditions remained favourable to economic activity, with demand for loans from businesses and individuals expected to remain strong. Banks continued to maintain prudent lending standards.
Meanwhile, assets of non-bank financial institutions grew by 9 per cent, although the sector remains relatively small, limiting its potential systemic impact on the wider financial system.
The report also identified cybersecurity resilience as a key supervisory priority amid the rapid expansion of digital financial services. The Central Bank of Oman continues to strengthen regulatory frameworks and improve the financial sector's preparedness to address emerging cyber threats.
It cautioned that geopolitical developments, uncertainty surrounding global trade policies, cybersecurity threats and rising external risks require continued vigilance and proactive risk management.
The Central Bank reaffirmed its commitment to safeguarding financial stability through proactive macroprudential policies, stronger risk-monitoring mechanisms and forward-looking regulatory and supervisory frameworks.
The report provides a comprehensive assessment of Oman's financial system, examining emerging risks, developments across the financial sector and policy measures aimed at ensuring stability and supporting sustainable economic growth.
