Oman’s first Islamic bank sees profit in 2014

Oman’s Bank Nizwa, a newly formed Islamic lender which sold shares to the public in June, expects to post its first profit in 2014 and will elect a new board this month, its chief executive said yesterday. “We aim to make our first profit in 2014 though we would like to make it happen sooner, in the first year of our operation, but that may not be possible,” Jamil al-Jaroudi, CEO of Bank Nizwa, told Reuters in an interview. Jaroudi said the bank’s new board would be elected in a shareholders’ meeting set for July 31. The lender failed to elect a board after it was unable to get the required quorum at a general meeting last month, three sources familiar with the situation told Reuters. “We will start our operation two weeks after that (electing board) with three branches, in Nizwa, Sohar and Muscat. Eighteen months after the start of our operation, we hope to open about seven branches nationwide,” al-Jaroudi said. Bank Nizwa, the sultanate’s first Islamic bank, attracted 681mn rials ($1.77bn) of bids in its initial public offering, 11 times the sum it planned to raise, signalling strong interest from investors. It eventually raised 60mn rials ($155.9mn) in the 40% IPO. Its shares surged 13% on its first day of trading on June 10, but has given back most of those gains to trade slightly above its 102 baisas offering price yesterday. Al-Jaroudi said the oversubscription of the bank’s IPO was “a good indication” and he hoped the returned funds will be used by customers as deposits. “It shows that we are well placed and there’s a healthy appetite for a fully fledged Islamic bank in Oman,” he added. Bank Nizwa was the first IPO this year in Oman. The country’s market regulator has said it expects three to four new listings in 2012. While neighbouring Gulf States have ramped up Islamic finance services in recent years, Oman stood out by refusing to participate in the industry. The central bank reversed that stance last year, partly to prevent the outflow of Islamic funds. Shariah-compliant lender Al Izz International Bank, Oman’s second lender to be licensed for Islamic operations, had been expected to issue an IPO of 40% of its 100mn rials capital by June this year. from gulf times.