MUSCAT, MAY 26 - Leading investment house Oman International Development and Investment Company SAOG (Ominvest) has announced that its subsidiary Oman Arab Bank (OAB) has written to Alizz Islamic Bank to explore the possibility of a “strategic collaboration” that may lead to an eventual merger of the two entities. The announcement came in a filing to the Capital Market Authority (CMA) on Thursday. The proposed “Strategic Collaboration”, Ominvest said in its filing, will be subject to both institutions agreeing on the terms of the transaction and subsequent approvals from the respective Board of Directors, shareholders and regulators.
The move, if it crystallises, will create a lender with assets of about RO 2.81bn, taking Oman Arab bank from its current position as the 6th largest bank in Oman to the 5th largest in terms of total assets, according to Muscat-based investment banking platform U Capital. “Oman Arab Bank’s net loans are RO 1.74bn and Alizz’s Islamic financing is worth RO 506.5m as of Q1’18. Oman Arab Bank has RO 1.77bn in customer deposits and Alizz has RO 542m (merged entity will have RO 2.32bn in total deposits). If the merger goes through, then the merged entity is expected to have a credit market share of 9.5 per cent and deposit market share of 10.5 per cent as of 1Q18,” said U Capital.
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