Banks are the backbone of the economy of the country because they play a significant role in the effort to attain stable prices, high level of employment and sound economic growth. The banking companies in Oman has been witnessing a significant growth in recent years, mainly due to sustained increase in oil prices, efforts to diversify the economy, implementation of large industrial, real estate and infrastructure projects and growing emphasis on the private sector. The banking system in Oman has been through several rounds of mergers since the 1990s with a few bank exits and new entrants, and as at the end of 2009, the number of commercial banks stands at a total of eighteen, of which seven are locally incorporated, two specialized banks and nine are branches of foreign banks. The locally incorporated commercial banks are Bank Muscat (BM), National Bank of Oman (NBO), Oman International Bank (OIB), Oman Arab Bank (OAB), Bank Dhofar (BD), Bank Sohar (BS) and Al Ahli Bank (AB). The purpose of this study is to compare the financial performance of four local banks in Oman. Quantitative analysis was undertaken by looking at various sets of financial ratios that are routinely used to measure the performance of banks. Financial ratios were used to calculate the Return On Assets ( ROA), Return On Equity (ROE), Net Interest Margin (NIM), Risk Adjusted Return On Assets (RAROA), and Risk Adjusted Return On Equity (RAROE) during the period from 2010 to 2014. Under statistical analysis Mean and standard deviation are also used for finding their variation and averages of the result.
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