MUSCAT: In a significant move that could reshape Oman’s banking landscape, ahlibank SAOG has formally accepted a Letter of Intent (LoI) from Sohar International Bank SAOG proposing a merger. This development follows the initial disclosure made on April 7, 2025, concerning the receipt of this proposal. On April 10, 2025, ahlibank’s Board of Directors convened to evaluate the strategic implications and potential benefits of the merger.
After thorough deliberation, the Board resolved to proceed with the letter of intent, which outlines preliminary conditions for the merger. Central to the proposal is the structure of the merger, which is to be executed through incorporation. Under this structure, all assets and liabilities of ahlibank will be transferred to Sohar International, effectively consolidating both institutions by law on the merger’s effective date.
The letter of intent further stipulates the consideration for ahlibank shareholders, who are expected to receive shares in Sohar International as part of the transaction. This agreement is subject to various conditions, including regulatory approvals and further shareholder consent.
This proposed merger is part of a broader trend of consolidation within the Gulf’s banking sector, as financial institutions seek to enhance scale, reduce costs and improve competitiveness in a crowded market. In Oman, several smaller banks have explored partnerships in recent years to navigate tighter margins, rising compliance costs and economic shifts associated with energy transition efforts.
Notably, Sohar International completed a merger with HSBC Bank Oman in 2024, demonstrating its strategic intent to expand through consolidation. Additionally, ahlibank received interest from its domestic rival, Bank Dhofar, for a possible merger in 2023, indicating its openness to strategic partnerships.
As both banks move towards due diligence and final negotiations, market observers will be closely watching regulatory developments and stakeholder reactions. The successful completion of this deal could catalyse further strategic alignments within Oman’s financial sector.
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