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An analysis of domestic and foreign banks’ internal performance by investigating their financial ratios shows that banks in Bahrain, Oman, the United Arab Emirates (GCC countries) have improved their performance over the past several years. Commercial banks in these GCC economies are well capitalised and have adopted modern banking services. Most banks are found to be financially sound by international standards, measured by all key financial ratios. Their operations can be characterised by satisfactory asset quality, more than minimum BIS capital/asset ratio, and high level of profitability. External performance is measured by evaluating banks’ market shares, regulatory compliance and public confidence; and most of the banks show better progress. Harmonization of the banks’ supervisory and accounting systems towards IAS has contributed to the safety and competitiveness of the banking sector.

The purpose of this paper is to underline the significance of invoking Big Data and Internet of Things (IoT) technologies in Omani Banks. Opportunities and challenges are also being discussed in the case study.

Four Omani banks representative of local, international, Islamic and specialized banks are being studied in terms of their social networking presence on Facebook and their e-banking facilities. Also, impetus is laid upon the aggregation of internal data and vast amounts of semi-structured external data from public sources, including social media.

The case study shows that Big Data analytics and IoT technologies may be utilized by the Omani banks for facilitating them in “forecasting” and “nowcasting”. Besides, customers may be better managed with better and efficient services. However, there are challenges in tapping these technologies such as security, infrastructure, regulatory norms, etc.

Banks in Oman need to appreciate the utility of Big Data and IoT technologies, and for this, a robust IT infrastructure should be institutionalized.

The case study is a major step in integrating Big Data and IoT technologies in Omani banks across four variants of national, international, Islamic and specialized banks. This is the first study where such integration has been emphasized in the Omani banking sector.

Average bank net interest margins vary widely across Gulf Cooperation Council (GCC) countries, net interest margins of Omani banks are significantly higher. The resultant low level of financial intermediation implies reduced investment and economic growth. Understanding the reason for these high and persistent spreads is important to develop a policy for improving effectiveness of the banking system. The paper aims to discuss these issues.

Net interest margins of Arab GCC banks during the period 1999-2012 are examined using the balanced panel regression model with bank specific, financial/market structure specific and macroeconomic factors as determinants. The method used for estimation used is the estimated generalized least squares (EGLS) method with both fixed effects and random effects.

Bank-specific variables, which explain net interest margins in GCC, are bank capitalization ratios, loan ratios and overhead expenses. Spread of banking sector (as measured by ratio of total bank credit to GDP) is positive and highly significant, implying that along with the expansion of the banking sector in GCC economies, interest margins of banks also improved. Omani banks were able to increase interest margins by aggressively marketing high yield personal and credit card loans, and, zero interest paying deposit products. The study also finds a negative relationship between concentration and net interest margin, and attempts to explain this finding which is at variance with other country studies using the price leadership model of oligopoly.

The standard, accepted econometric model of net interest margins which has been used in earlier studies is unable to explain the high net interest margins of banks in Oman although it is able to explain interest margins in other GCC countries. There is a need to develop non econometric models. More work is needed on the implications of NIM spreads for how they affect an economy.

The study shows that as the banking sector spreads in the economy, individual banks have more opportunities to market their products while at the same time maintaining interest margins. Bank managements should note this point and look for opportunities to expand.

There is no evidence of any empirical studies which focused on net interest margins in the GCC countries. This study attempts to fill in this gap with a view to nudge policy makers to look at the issue of high interest margins and its detrimental impact on economic growth and development in the Gulf region. The paper is useful for policy makers to understand and rectify the problem of excessive interest spreads which is hurting the financial intermediation process.

In 2013-2014, Bank Muscat and National Bank of Oman requested a merger and Bank Sohar and Bank Dhofar lodged a similar request. This paper aims to investigate the shape of the market structure, and it tries to answer whether approving such requests is good for the industry, economy and society.

The study examines the market structure of Oman Banking Industry, and it also presents the shape of the market structure if there had been an approval for these mergers’ requests. The Herfindahl–Hirschman Index (HHI) and the biggest k-banks Concentration Ratio (CRk), which measure concentration changes over 17 years during the period 1998-2014, are used in this study.

The study finds that Oman’s Banking Industry is highly concentrated, which should cause concerns over these two requests of mergers or similar requests in the future. In general, the concentration ratio shows decreasing trend. The concentration ratio in the deposit market implies a concentrated market with CR2 and CR3 recording 67 and 85%, respectively, while HHI reached 2,864 points in the 1998. However, in 2014, the concentration ratio had decreased, to CR2 and CR3 recording 52 and 65% respectively, and HHI standing at 2,112 points.

The researcher suggests future investigation and further research in setting a benchmark index as a guideline for mergers’ requests.

Exercising monopoly power, by fewer banks, is very harmful to the economy. Charging higher interest rates on business loans escalates the cost of production of products and services which will cause inflation; therefore, monopoly power will lead to slow growth of the economy.

Regulators in Central Bank of Oman (CBO) or in any central bank should be very careful in granting mergers, especially among big banks, because it enables newly bigger banks to exercise monopoly power, thereby harming depositors who will be getting low deposit interest rates and harming borrowers by charging them high loan interest rate.

Even though, this study discussed two requests of mergers between banks in Oman; however, it has presented formal approaches to the measurement of market structure in any country. Overall, it provides the policymakers in making the final decisions on mergers between banks in the future which are not limited to these banks or to Oman’s Banking Industry.

The concept of Islamic banking (IB) as a discipline and the introduction of the full-fledged Islamic banks and Islamic windows are relatively newer developments in the banking sector in Oman. This paper aims to assess customers’ perceptions of the Islamic banks and IB windows in Oman.

Following the interpretive paradigm and an exploratory research design, data collected through personal interviews with a group of 60 respondents in two of the prominent cities in Oman were analysed qualitatively.

The study found that customers in Oman had mixed feelings about the Islamic Banks. While some of them were not sure if the banks follow the Islamic principles, a majority of them had not opened an account with the Islamic banks or Islamic windows. The study revealed some vulnerabilities in the areas of their operations, marketing practices, staff knowledge of products and customer-dealings, as well as customers’ understanding of Islamic banks, their principles and practices.

As the advent of IB is relatively new to Oman, the insights gained by this study will have wider implications for the growth of IB locally. The outcomes of this study would appraise the officials and regulators of Islamic banks and Islamic windows with customers’ perception of IB. The elimination of the identified weaknesses would help them to improve the knowledge, quality and the marketing and promotion of products and services while competing with the conventional banks.

This study is a pioneering effort to know the status of IB and customers’ motivations in Oman towards IB.

The purpose of this study is to try to answer whether the banking system in Oman is fair for both depositors and entrepreneurs.

The interest margin decomposition is based on the methodology proposed in Randall (1998). The income statement of banks defines profits before taxes (P) as interest income (II), plus non-interest income (NII), minus interest expense (IP), minus operating costs (OC) and minus provision for loan losses (Prov). After rearranging this identity, the net interest revenue can be expressed as follows: II – IP = OC + Prov + P – NII. The above expression decomposes the margin into the following cost and profit components: reserve requirement costs, operational costs, loan loss provision costs, profitability and non-interest income (with a negative sign).

A trend analysis of commercial banks’ interest rate spreads in Oman exposes the following facts: First, the implicit interest margin is relatively small (in the neighborhood of 1 percentage point); second, profits constitute a substantial proportion of the margin; third, the share of operating costs in the margin has been broadly constant over time; fourth, reserve requirement costs have been reduced following the decline of the reserve requirement ratio; and fifth, the weighted average interest rate on deposits base is lower than the rate of inflation.

This work is original.

This paper aims to investigate small and medium enterprises’ (SMEs) owner–managers’ awareness, willingness and perceptions concerning Islamic financing instruments as an alternative sourcing decision in SMEs’ businesses.

The research employed mixed methods to gather data. A questionnaire survey was conducted via face-to-face interviews with 385 SME owner–managers operating in Muscat, Oman’s capital city, along with face-to-face discussion on Islamic finance with 86 SME owner–managers. Descriptive and thematic analysis were used to analyse the data.

The findings indicate that SME owner–managers are aware of Islamic banking principles and have knowledge of Islamic financial instruments, despite Islamic finance being new to Oman. Interestingly, although the majority of the participants indicated their intention to adopt this new finance method, they were motivated by special requirements other than finance. Their positive perception of Islamic financing methods could play a significant role in developing the Islamic banking industry.

The research is limited in that its data came only from Omani SME owner–managers in Muscat. Future research could investigate wider samples. Secondly, the study’s findings lack generalisability to larger and public enterprises, because only SME owner–managers were surveyed.

This study will be important for policy makers concerned about SMEs’ financing, Islamic financial institutions and new entrants into the Islamic banking industry, as it provides empirically evidence of Omanis’ views, and more specifically those of Omani SME owner–managers, on the recent introduction of Islamic finance into the country. The insights this study offers should help them to develop the strategies required to attract SMEs and to construct policies and regulations to improve Oman’s Islamic banking industry.

The research is significant, as it is the first study to investigate the awareness, willingness and perceptions of Omani SMEs regarding Islamic banking in Oman. Even though all Omanis are Muslims, Oman was the last of the six-nation Gulf Cooperation Council countries to introduce Islamic finance. Thus, this emerging market provides an important basis from which to extend future research on Islamic finance to other potential Islamic finance markets.

This study aims to explore the extent to which internal marketing influences employees’ perceived ability to deliver service quality in the Islamic banking industry in Oman. Additionally, the influence of perceived service quality on perceived customer satisfaction is established.

Data was obtained from retail banking branch employees at the customer front line of Islamic banks in Oman using electronic and person-administered surveys, and 272 responses were deemed suitable for data analysis. The measurement and structural models were measured through structural equation modelling.

The findings show that internal promotion, internal process and internal purpose are enablers of employees’ perceived ability to deliver service quality in the Islamic banking industry of Oman. In addition, service quality was found to have a strong positive influence on perceived customer satisfaction in Islamic banks.

This study demonstrates that internal product, internal price, internal promotion, internal process and internal purpose are influencers of service quality, and the latter has a direct relationship with perceived customer satisfaction in Islamic banking.

The findings can guide the Islamic banking sector in Oman on how internal marketing can foster service quality, ultimately leading to positive perceived customer satisfaction experiences.

The internal marketing mix model is predominately a Western model, which has been tested primarily in mature Western markets. This study reflects on ten internal marketing mix elements, which have been tested for the enablement of service quality and perceived customer satisfaction in Oman.

The purpose of this paper is to examine the level of web-based Online Financial Reporting Disclosure (OFRD) in Islamic banking in Oman.

A checklist was developed to measure the level of Web-based Online Financial Reporting Disclosure in Islamic banking consist of 70 items (Appendix). The sample of the study consists of Islamic banking in Oman.

The findings of the descriptive analysis indicated that the overall level of web-based online financial reporting disclosure was 69%.

The practical implication of the results are helping the authorities to put more efforts toward the quality of web-based online information to satisfy all parties.

To the best of the author’s knowledge, there is no similar research done to explore the level of web-based online financial reporting Disclosure (OFRD) in Islamic banking in Oman

The purpose of this case study is to chronicle a remarkable business turnaround in the banking sector of Oman.

A narrative of the rapid transformation of a laggard bank into Oman's second largest bank is presented and analyzed.

The momentum for change was initiated and sustained through the leadership’s willingness to take big risks and use massive challenges as opportunities to kindle team spirit and solidify a new, winning attitude among the staff.

The bank focused on offering frictionless, low-risk, incremental value at scale. That’s the digital era performance requirement. For example, it introduced a highly successful no-frills credit card marketed as a fast-to-approve and easy-to-use alternative.

The case provides a rare glimpse into management practices in middle eastern banking sector.