The Omani banking sector’s operating environment is expected to remain resilient despite the Iran war, according to Fitch.
Banks will continue to benefit from favourable operating conditions, supported by economic growth and fairly high oil prices, the ratings agency said.
The sultanate is the most insulated Gulf country from the conflict. Profitability of Omani banks is expected to remain adequate in 2026, with the impact from the conflict on loan impairment charges (LICs) likely to be contained.
Profitability metrics were broadly stable in the first quarter of 2026 and 2025. The average operating profit/risk-weighted assets ratio for Fitch-rated banks remained at 2% in the first three months of 2026, unchanged from 2024 and 2025.
Lower rates contained the impact on the sector’s interest margins, the report said.
Fitch expects Omani banks to maintain adequate capitalisation metrics in 2026, supported by reasonable growth and sound earnings generation.
The funding and liquidity conditions are expected to remain reasonable. Fairly high oil prices will continue to support growth in customer deposits, which account for about 91% of sector non-equity funding.
Stable deposits from the government and government-related entities (GREs) will also continue to support liquidity. However, high deposit concentration remains a key risk.
Fitch expects the regional war to have a contained effect on sector loan growth.
“We forecast loan growth at about 5% in 2026, just below our previous forecast of 6–7%,” it added.
(Editing by Seban Scaria [email protected] )