MUSCAT - The net profits of Omani commercial banks fell 6.89 percent in the first nine months of 2009 due to high bad loan provisions and slower credit growth, the central bank said in a bulletin.
The combined net profit of the sector dropped to 194.9 million rials ($506.2 million) in the January-September period compared to a year-earlier year, according to the report obtained on Thursday.
"The year-on-year decline in net profits could be explained by higher provisioning by commercial banks and by deceleration in the pace of credit growth," the central bank bulletin said.
Most Gulf Arab banks booked heavy provisions this year, mainly after concerns over the solvency levels of heavily indebted Saudi conglomerates Saad Group and Ahmad Hamad Algosaibi & Bros (AHAB) which started to surface in June.
The two firms are at the centre of an estimated $22 billion debt restructuring which has further dampened slowing lending activity to the private sector.