Aabar Investments PJSC, an Abu Dhabi government-controlled company with stakes in UniCredit SpA and Daimler AG, will be the cornerstone investor in Al Izz Islamic Bank as Oman seeks to tap demand for Shariah-complaint products.
Al Izz is under formation and getting ready for an initial public offering, the bank said in an e-mailed statement yesterday. Oman approved the creation of its first two Islamic banks last year, Al Izz in October and Bank Nizwa in May. Aabar, Huriah Company LLC and Tasameem Real Estate Company LLC are promoters of Al Izz, according to the statement.
The shares of Bank Nizwa jumped 13 percent when they began trading on Oman’s stock exchange on June 10. The bank will start operations in the third quarter, according to its website.
Prior to Bank Nizwa and Al Izz, Oman was the only country in the six-nation Gulf Cooperation Council without dedicated Islamic banks. Bank assets that comply with Shariah’s ban on paying and receiving interest may account for a 10th of the industry’s total within 12 months of starting services, Hilal Al Barwani, vice president of banking supervision at the Central Bank of Oman said in January.
The move into Shariah-compliant finance will give banks in the country, home to almost three million people, the chance to tap growth in the global Islamic finance industry. Shariah financing is expanding as much as 16 percent a year and the industry may be valued at $1.5 trillion by the end of 2012, Raj Mohamed, managing director at Singapore-based consulting firm Five Pillars Pte, said Jan. 18.