After about three years of bad-loan pains that had been significantly eroding the banking-sector profitability since 1999, evidences indicate that the banking sector is really poised to rebound in 2004.
The banking sector profitability (net of provisions and tax) for the year 2000, 2001 and 2002 stood at RO51.9mn, RO4.9mn and RO61.9mn, respectively. In the last few years, year 2001 was the worst hit following large non-performing loans and the subsequent provisioning (as a consequence of financial failures of a few business entities).
The local banks are now adopting high-tech banking with the introduction of internet banking and smart card technology in a big way with a view to keep themselves ready from the overseas competition in view of Oman joining the WTO. They also perceive increased competition from the strong GCC banks after the creation of GCC common market.
The new breed of online banks from Europe and America pose another potential challenge to local banks. As the local market is not big enough, to increase the capital base and to strengthen their financial viability, local banks are trying to become stronger through mergers, acquisitions, overseas expansion and diversification.
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Oman's brighter banking sector (page 4 of 4)
- Oman: Monday, January 05 - 2004 at 15:57
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Peter J. CooperMonday, January 05 - 2004 at 15:57 UAE local time (GMT+4)
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