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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

OAB and Alizz Islamic Bank ink MoU to pursue merger talks

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Muscat, OCT 6 - Oman Arab Bank (OAB) and Alizz Islamic Bank (AIB) announced the signing of a Memorandum of Understanding (MoU) to continue the dialogue between them concerning the intended merger between the two parties. This was done following obtaining initial approvals from the Capital Market Authority (CMA) and the Central Bank of Oman (CBO). The memorandum sets out a broad framework for the merger process, wherein Alizz Islamic Bank will continue to operate as an independent Islamic banking institution under the supervision of an independent management team, but operating under the umbrella of the newly merged entity. Furthermore, it will continue to operate under Sharia-compliant banking principles, under the guidance of the Sharia Supervisory Board, and in line with the standards of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and local regulatory authorities.


The memorandum also encompassed an agreement between both parties to appoint legal and financial advisers to conduct due diligence reviews of both entities; paving the way for the proposed merger. The memorandum was signed by Saleh bin Nasser al Araimi, a member of the Board of Directors of Alizz Islamic Bank, and Salaam bin Said al Shaqsi, the CEO, on behalf of Alizz Islamic Bank, and was signed by Abdulaziz al Balushi, a member of the OAB Board of Directors, and Rashad bin Ali al Musafir, the CEO, on behalf of Oman Arab Bank. The ceremony was held at OAB’s Head Office in the presence of other senior executives from both institutions.


Commenting on the occasion, HH Sayyid Taimur al Said, Chairman of Alizz Islamic Bank, said, “Since the announcement of the planned merger in May, both banks have made good progress towards developing a mutually beneficial framework for the intended merger. This is with the objective of bringing together the best talents from OAB and Alizz Islamic Bank to create a market-leading Islamic bank that will continue its operations as an independent Islamic banking institution.”


Remarking on the signing of the agreement, Rashad al Zubair, Chairman of the Board of Directors of OAB, said, “The success of the merger between the two institutions will result in the formation of a new financial entity that will be more competitive, both locally and regionally, and will be in a position to promote the development of the financial sector in the Sultanate in line with the latest international standards. The proposed merger will offer a number of synergies as the banks currently have complementary products, systems, technologies and customer segments.”


The merger process began at the end of May when OAB approached Alizz Islamic Bank for talks on the possibility of entering into a strategic partnership that could lead to a possible merger between the two institutions down the road; a proposal which was subsequently accepted by Alizz Islamic Bank. The signing of this MoU is yet another step in this ongoing process.


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