Oman

Al Madina expects robust takaful insurance growth in Oman

Al Madina Insurance anticipates a robust growth in takaful insurance business in Oman, if the trend in neighbouring countries is any indication. Al Madina expects the market to grow between OMR60 million to OMR70 million in worst case scenario and OMR150 million to OMR180 million in best case scenario in the next three to five years, the company's chief executive officer Gautam Datta said. He added his company did not change the premium, after converting it into an Islamic insurance company from January this year. Referring to re-insurance, he said Al Madina has a re-insurance programme of over 55 per cent and is planning to expand its retail and personal lines portfolio.

Islamic banking: Challenges and solutions

In principle, Islamic banks act as financial brokers between the investors (depositors) and companies or individuals seeking finance solutions that are sharia compliant; sharing the profit/loss. One of the most important principles of Islamic banking is to play an active role in achieving social development. Islamic banks should be able to provide financing solutions for the different investment and commercial projects in a way different from the traditional commercial banks. However, Islamic banking institutions in the world in general and GCC in particular face many challenges on the foremost of which is the inability to attract leaders and manpower specialised in Islamic banking. They are therefore required to provide high quality and intensive training for their staff.

Bank Nizwa: Islamic banking needs time to grow in Oman

Islamic banking in Oman is growing at a slower pace than expected and requires new legislation and stronger public awareness of the industry to flourish, Bank Nizwa CEO Jamil El Jaroudi said. He added that there is also a skills shortage in the Omani market. The legal and regulatory framework in Oman supports the launch of the Islamic banking industry but further development of legislature is needed for the sector to mature. Bank Nizwa, Oman's first independent Islamic bank, started operations in January 2013 and raised OMR 60 million in an initial public offering of 40% of its shares in May 2013. Jaroudi said the bank had no plans to issue new sukuk, or Islamic bonds. He said the bank planned to launch Internet banking services and other shariah-compliant products.

Ministry holds seminar for Waqaf agents

The Omani Ministry of Awqaf and Religious Affairs held a seminar for Waqaf agents, in cooperation with Meethaq for Islamic banking at the Institute of Sharia Sciences. The seminar aims to recall the importance of Waqaf in contemporary life, the call to revive the Waqaf Sunnah in modern methods and strengthening the spirit of cooperation and partnership between the Ministry of Awqaf and Religious Affairs, Waqaf agents and other entities. Many working papers were presented in the seminar. The first paper which was presented highlighted the efforts of the ministry to organise Waqaf work, types and importance of Waqaf, the memorandum of understanding with Meethaq for Islamic banking and the management techniques to develop the Waqaf fund, among others.

Oman ahead in regulating Islamic finance, but vibrant capital market missing

Experts at the seminar of ‘Developing a sustainable Islamic banking industry in Oman’ have said that the demographic changes in the country and the rising employment level will bring a ‘huge potential’ for growth in the financial sector. Islamic banks will need to play an effective role in order to have their share of the cash. When it comes to the regulation of Islamic finance, particularly in liquidity and treasury management, Oman is one of the most advanced countries. However, the lack of a global Islamic capital market, particularly an Islamic interbank market, and the shortage of short-term, long-term, or highly tradable investments which will bring the capital risk, are the main issues concerning the development of Islamic banking.

Acting CEO of alizz islamic bank resigns

Jamal Darwiche, acting CEO of alizz islamic bank, has resigned from his position for personal reasons. The bank said that the board is engaged in filling this role permanently, but added that Saif al Yarubi will take on this responsibility during the interim period. Before joining alizz islamic bank in July 2012, Darwiche held the position of chief operating officer and general manager of retail banking at Masraf Al Rayan Bank in Qatar. Saif al Yarubi was appointed as chief financial officer at alizz islamic bank in September 2013. He joined alizz islamic bank after serving five years as finance director at Investment Corporation of Dubai (ICD).

Bank Nizwa helps customers to fulfill Zakat obligations

Oman's Bank Nizwa has partnered with the Ministry of Endowment and Religious affairs to create a seamless opportunity for customers to pay their Zakat. Customers can now easily transfer the required amount from their accounts into the allocated Ministry of Religious Affairs account at Bank Nizwa . They can also deposit cash directly into this account. Customers who regularly wish to transfer Zakat can set up a standing order. Bank Nizwa customers who choose to pay their Zakat through the afore mentioned Bank Account are assured of a waiver of fees on all standing orders linked to this account. There are also fee waivers on internal, local and International transfers associated with this account.

Takaful may reshape Oman's crowded insurance market

This month, Oman's insurer Al Madina Takaful converted itself from a conventional insurer to a takaful company. It changed its conventional insurance clients to takaful policies after a customer education process, reportedly without client exits or other problems. In the next two years, the firm plans to add up to seven new branches to its network of three, and distribute products via Islamic banks, a practice known as bancatakaful. Two new firms could soon follow in Al Madina's footsteps: Takaful Oman Insurance and Oman United Insurance. However, their entry could crowd the market further and add to pressure on profitability. The Capital Market Authority (CMA) has yet to publish its final rules on takaful, while an insurance law is still in the draft stage.

First Sukuk in Oman Issued

Al Madina Investment (Al Madina) has organized an event to celebrate the issuance of the first sukuk in Oman. Al Madina acted as the Principal Advisor, Joint Lead Arranger and Joint Lead Manager for the OMR50 million Sukuk Al Ijarah issued by Modern Sukuk on behalf of Tilal Development Company (TDC). The proceeds from the sukuk will be utilized for the expansion of TDC's flagship project - the Tilal Complex. In the event, Al Madina honors the stakeholders and also the participants in the sukuk by presenting them with an award for their contribution to successful issuance of the sukuk.

Takaful Oman IPO to close on Nov 28

Takaful Oman Insurance, one of Oman's first takaful insurance providers and still under formation, has announced its initial public offering (IPO). The promoters are offering 40mn shares, each priced at 102bz - with a par value of 100bz and 2bz of issue expense. The IPO, which opened for subscription on October 30, will close on November 28. Takaful Oman is promoted by ONIC Holding, National Investment Funds Co ( Nifco ), Oman Investment Corporation (OIC); National Bank of Oman, Blue Door Investment Services LLC, bank muscat, and T'azur Takaful insurance company, one of the top five takaful companies in Kuwait.

UPDATE 1-Oman property developer sells country's first sukuk

Omani real estate developer Tilal Development Co has sold the country's first Islamic bond, a 50 million rial ($130 million) sukuk. Tilal's five-year sukuk, offering a profit rate of 5 percent and based on an ijara structure was privately placed with investors, arranger Al Madina Investment said. About 95 percent of the sukuk, rated BBB+ by Cyprus-based Capital Intelligence, was placed with local investors including pension firms and banks. Tilal, 40 percent-owned by sovereign wealth fund Qatar Investment Authority, will use proceeds from its sukuk to expand the Tilal Complex in Muscat, a flagship project which includes the Muscat Grand Mall as well as residential and office space.

Oman’s AMIC plans IPO as part of conversion into takaful firm

Oman’s Al Madina Insurance Co (AMIC) plans to list its shares on the local bourse as part of its transformation into a takaful firm. AMIC plans to issue 66.67 million shares with a face value of 0.1 rial per share, equating to 40 percent of its total post-IPO capital. The offer will take place this year depending on approval from Oman’s Capital Market Authority (CMA). It was unclear how much money AMIC planned to raise. Oman decided in 2011 to introduce Islamic finance; its draft takaful regulations require local Islamic insurers to be public companies, and AMIC said it expected to become one of the first takaful companies on the market.

Bank Dhofar CEO Resigns Amid Merger Talks

Bank Dhofar, has announced the resignation of its chief executive Anthony Mahoney for personal reasons, effective September 26. The Omani lender has appointed Abdul Omar Al-Ojaili as its acting chief executive. Bank Dhofar is planning to merge with Bank Sohar with a view to creating Oman’s second-largest bank. The new entity would have total assets worth 4.1 billion rials ($10.7 billion), according to quarterly financial statements, and a market capitalisation of around $1.8 billion. Bank Dhofar shares have risen 14 per cent year-to-date.

Oman may issue sovereign, Islamic bonds in 2014 - c.bank

Oman's government may issue an international sovereign bond and an Islamic bond next year, its central bank chief Hamood Sangour al-Zadjali said. He did not provide details on the size of the bonds, however. While Oman aims to develop its fledgling Islamic finance industry, a debut issue of sukuk by the government would be a major step towards that. Zadjali also said Oman planned a domestic issue of government development bonds worth 100 million rials ($260 million) in the fourth quarter of this year. The procedes will be used for development purposes as well as for projects. Oman's banking sector is expected to grow 15-20 percent this year in terms of assets.

Maisarah: Pioneers of Islamic priority banking services in the Sultanate

Maisarah, Islamic window of BankDhofar announced the launch of Oman's pioneering Sharia compliant priority banking services. Maisarah's teams of relationship managers are offering special products and personalised services. Ease of access is one of the features among other privileges that Maisarah has to offer through priority banking centers in the Muscat and Dhofar region. Customers can reap the benefits of savings accounts based on the Mudharaba contract as well as auto financing based on the Murabaha concept without lengthy procedures at preferential prices and services. Under the guidance of the Sharia compliant Board of Directors, Maisarah's banking solutions are on display at their stand-alone branches, which have been designed to minimize wait time and enhance each customer's experience.

Oman's Alizz Bank preparing for Q4 launch

Oman's Alizz Islamic bank has announced the completion of its comprehensive training plan, as part of preparations for to launch operations in the fourth quarter of the year. The training programme introduced branch, call centre and operational staff to the Shari'ah-compliant lender's full range of Islamic products and services and its corporate values.

Moody's: Special Comment - Islamic Banking in Oman: Solid Growth Prospects Moderated by Industry Challenges

Following the introduction of the Islamic Banking Regulatory Framework (IBRF) in December 2012, Omani banks are now allowed to offer Islamic banking services. Moody's views this as credit positive for the banks as expansion into Islamic banking has the potential to strengthen their franchises and diversify revenue generation, particularly for the largest banks in the system, which will be able to leverage their existing infrastructure and networks.

Launch of Sharia-compliant products in ODB’s agenda

Oman Development Bank (ODB) is considering the launch of an Islamic window to offer Sharia-compliant products to small and medium-sized firms. After Oman adopted Islamic finance in December by issuing regulations for the sector, developing Islamic finance and smaller firms are two policies which the government hopes will cut unemployment. Government-owned ODB is likely to opt for an Islamic window instead of a full-fledged conversión into an Islamic bank. The Islamic window is not expected to start operating before the end of this year. Under the rules for Islamic windows, ODB would only be able to offer Islamic products through stand-alone branches, which would require converting some of its existing 15 branches or opening new ones.

Sohar Islamic rolls out Shari'ah-compliant home finance scheme

Bank Sohar's Islamic banking arm, Sohar Islamic, has launched a Shari'ah-compliant home finance programme, as part of its plan to expand the products and services portfolio. The new product features flexible terms, which offer financing for up to 80% of the property value, with a repayment period of up to 25 years.

Bank Nizwa obtains investment banking licence

Bank Nizwa, Oman's first full-fledged Islamic bank, has received an investment banking licence that will allow it to manage funds and issue instruments such as Islamic bonds. The bank launched operations in January and is gradually rolling out a range of sharia-compliant products, aiming to grab a 5 percent share of the country's overall banking market in five years. In December, Oman became the last country in the six-member Gulf Cooperation Council to adopt Islamic finance, issuing extensive regulations for the sector.

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