Oman: alizz islamic bank eyes 20 per cent market share in five years

Muscat: alizz islamic bank, which opened its RO40 million initial public offering on Saturday, is targeting to capture a 20 per cent market share in Islamic banking business and a 3.5 per cent of total banking assets in Oman within five years. 

The promoters of the bank are confident of a robust growth in demand for Islamic banking products due to several favourable factors like an unmet demand for Islamic banking services, low banking penetration levels, experience of stakeholders in Islamic banking, high level of (72 per cent of Omanis) bankable population, favourable economic policies and strong economic performance.

Growth in Islamic banking has outstripped conventional banking growth across Gulf Cooperation Council (GCC) markets and is now valued at around $300 billion by asset value. The promoters are confident that Oman will experience a similar growth in its new Islamic banking market and that alizz islamic bank is uniquely placed to become a market leader. 

"The Islamic banking assets constitute 26 per cent of total banking assets in the GCC region. Barring the UAE, growth of Islamic banks was much higher than conventional banks,- Jamal Darwiche, chief operating officer (designate) of alizz islamic bank, said, while addressing a press conference here yesterday.

The bank is committed to delivering comprehensive commercial and retail banking solutions to the people of Oman. It intends to roll out an innovative suite of Sharia-compliant products, delivered to market-leading standards and supported by exceptional customer service. The bank is also confident of making profit in the second year of operation.

Darwiche said the bank has identified a high quality commercial space in the financial district for headquarters and the flagship branch. The bank will see the feasibility of opening more branches in the coming months. 

alizz islamic bank is offering 40 per cent of its paid up capital equivalent to 400 million shares, each priced at 102 baisas, to Omanis and non-Omani investors. There are two categories of applicants -” the first category is those who subscribe between 1,000 and 100,000 shares and the second category is those who subscribe between 100,100 and 10 per cent of the share offer. 

"It has a strong underwriting back-up from leading Omani institutions, which gives us great comfort,- added Abdullah Al Hinai, Deputy General Manager -” Investment Banking & Financial Institutions, bank muscat. The issue, which is lead managed by bank muscat, is fully underwritten by bank muscat, ahli bank, BankDhofar, Bank Sohar, The Financial Corporation, United Securities and Gulf Baader Capital Markets. 

The promoters have already contributed RO61.2 million, representing 60 per cent of the paid up capital of RO100 million. The issue will close subscription on October 21. 

The bank is promoted by local and regional investors, who have a successful track record in Islamic banking and financial services. The promoters are Huriah Company (10 per cent), aabar Investments (20 per cent), First Energy Oman (15 per cent) and Tasameem Real Estate Company (15 per cent). 

Addressing the media, Ahmed Alkhonji of Huriah Company, said; "The large unmet demand for Islamic banking means that alizz islamic bank is uniquely placed to become a market leader for banking products. We are delighted to have aabar, First Energy Bank and Tasameem as our partners and the bank will benefit immensely from their considerable international experience.- 

Elaborating on the progress achieved by the promoters in launching operation so far, Darwiche said; "We have done few steps that keeps us on track to launch the bank operations.- The business model has been finalised and promoters' committee has also been constituted. 

The members of the promoters' committee, which is overseeing the formation of the bank, include Yeshwant Desai, a former CEO of bank muscat, Mohammed Badawy Al Husseiny, CEO of aabar Investments and Mohammed Ghanem, Acting CEO of Fist Energy Bank. 

(Times Of Oman / 24 Sep 2012)


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