According to a recent report from ratings agency Moody's, the new Islamic banking sector of Oman would likely to corner between six and eight percent of the market in the next to three and five years. Moody's had called the introduction of the Islamic Banking Regulatory Framework a 'credit positive for the local banks'.
This was an expansion undertaken into Islamic banking with the potential to strengthen their franchise as well as diversify revenue generation in the market. Moody's added that the industry would still need to overcome certain challenges in order to reach the anticipated growth levels.
Moody's Senior Credit Officer and the report's author, "We believe that Islamic banking operations in Oman could capture a 6-8% share of system assets within the next 3-5 years. This share will stem primarily from the 'conversion' of customers from conventional to Islamic banking services."
The projections made by Moody's were based on the solid operating environment in Oman, which would result in an increase in the demand for general credit. Another factor considered is the appeal of Islamic banking to a majority population of Muslims.
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