Cross-border and digital growth for Oman’s largest Islamic bank

Oman

Khalid Al Kayed, CEO of Bank Nizwa, talks to The Energy Year about the growth of Islamic banking in Oman, the main strategic pillars driving the bank’s growth and its expansion outside of Oman. Bank Nizwa is Oman’s first dedicated Islamic bank, with fully sharia-compliant products and services.

Islamic banking has seen strong momentum recently in Oman. What has Bank Nizwa’s contribution been to this growth?
Islamic banking in Oman has been growing steadily, now representing 19% of total assets, and Bank Nizwa is at the forefront of this expansion. We have maintained strong double-digit growth across all financial indicators – 24% in deposits, 15% in financing and consistent increases in total assets outpacing the sector.
Our 2024 net profit reached OMR 18 million [USD 46.7 million], reflecting rising client confidence, growing awareness and sustained demand for sharia-compliant products. Bank Nizwa continues to lead with the highest market share, with almost 24% of the Islamic banking assets, deposits and financing.

What main pillars will drive Bank Nizwa’s growth in the coming years?
Our strategy is rooted in our core strengths: wholesale, retail and treasury banking in Oman. We are expanding with a clear focus to execute a digital strategy that moves beyond transformation into open banking and new business models, launching dedicated pillars for sustainability and waqf [Islamic endowment], and strengthening our ecosystem support.
We have restructured wholesale banking into commercial and treasury units for better opportunity alignment. We are also advancing internationally – physically with new branches and digitally through platform expansion. Internally, our aim is to empower the front line while automating the back office to improve efficiency and cost management.

What steps have you taken in your regional expansion strategy?
We have initiated our regional expansion by securing the initial approval to establish a branch at the Dubai International Financial Centre (DIFC), our first physical presence outside Oman. This move aligns with Oman Vision 2040 by aiming to support FDI, trade finance, syndications and global market operations that benefit the Omani economy. The branch is expected to launch by the end of 2025 or early next year.
We see DIFC not just as a regional extension, but as a unique offshore platform that enables us to engage in cross-border transactions, including with Saudi Arabia and Qatar.
Our aim is to create a two-way flow: attracting international capital and relationships back into Oman while supporting global trade finance and global market transactions.

What is Bank Nizwa’s approach to digitalisation in the Islamic banking space?
As mentioned, digitalisation is a core pillar of our strategy. For Islamic banking, which involves more complex processes than conventional banking, smart digital solutions are essential to simplify transactions. These include, for example, smart contracts that eliminate repetitive sharia checks. This approach also addresses financial inclusion.
While we have 23 branches, we are not aiming to compete on numbers with other banks in Oman. Rather, we want to compete on accessibility by creating digital channels that reach more people more quickly and securely.
We have launched Oman’s first fully digital Islamic branch in Muscat’s Mall of Oman and are rolling out hybrid branches with 60% digital functionality. Given Oman’s demographics, we are also focused on the youth segment through mobile banking and tailored products such as minor accounts and youth cards.
We believe that fintech collaboration and open banking are the future. They are no longer optional. That’s why digitalisation is a core part of our strategy, built in three phases. We started with infrastructure refurbishment in 2021. This was followed by a core banking upgrade, and now we are building retail and corporate platforms that link clients directly through automated channels.

What digital solutions are you offering larger corporate clients?
Our digital strategy is designed to serve all client segments. For corporates, we are implementing a robust transactional banking platform. This system allows businesses to authorise and execute operations such as payroll and payments, with full control and security. In the next phase, we will enable host-to-host trade finance – that is, directly between banks – with no manual input.
This is part of a broader platform strategy that includes full automation, open banking integration, AI and data analytics. Our retail and corporate clients will benefit from seamless, end-to-end digital services that elevate Islamic banking into a competitive digital alternative.

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