Oman's Bank Nizwa, a newly-formed Islamic lender which sold shares to the public in June, failed to elect a new board after it was unable to get the required quorum at a general meeting last week. Bank Nizwa, the sultanate's first Islamic bank, attracted 681 million rials (US$1.77 billion) of bids in its initial public offering, 11 times the sum it planned to raise, signaling strong interest from investors. The lender held a Constitutive General Meeting on June 21 to elect its board of directors and approve the bank's articles of association and memorandum of understanding. Votes representing 75 percent of the bank's capital were required to proceed with the meeting but only 62 percent of the voting rights could be arranged, people close to the matter told Reuters. "This is a big blow for the bank. They needed the approval to go ahead and appoint a board and a sharia committee. Now they have to wait for the next meeting to get approval," one banking official said. The failure to elect a board delays the start of banking operations and casts a pall over another upcoming Islamic bank IPO. Sharia-compliant lender Al Izz International Bank has been expected to issue an IPO of 40 percent of its 100 million rials capital by June this year. The lender raised 60 million rials (US$155.9 million) in the 40-percent IPO. Its shares surged 13 percent on its first day of trading on June 10 but the early gains waned and the stock has returned to its 102 baisas offering price. While neighboring 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. Bank Nizwa was the first IPO this year in Oman. The country's market regulator has said it expected three to four new listings in 2012. Bank Nizwa shares were flat at 102 baisas on the Muscat bourse on Sunday, after dropping to 100 baisas earlier in the session, Reuters reported.
