Two Oman Banks Discuss Merger

Oman Arab Bank has initiated merger talks with fellow Muscat-based Alizz Islamic Bank, as consolidation among (Persian) Gulf Cooperation Council countries lenders continues amid sluggish economic conditions. Oman Arab Bank, a subsidiary of investment holding company Ominvest, said on Thursday it had approached Alizz Islamic Bank earlier this week, requesting that the two banks “explore the possibility of a strategic collaboration that may lead to an eventual merger of the two entities,” Ominvest said in a statement on the Muscat securities market, Reuters reported. Alizz, in a separate stock market statement, said it had “agreed to proceed and explore this opportunity with Oman Arab Bank.” Alizz shares surged 3.9% on the news Thursday. Shares in Ominvest—whose other holdings include investment bank U Capital and Oman Real Estate Investment Services—were unchanged. The merger talks between the banks come amid weak economic conditions in Oman, which have hit local lenders hard. Moody’s Investors Service downgraded the sultanate’s sovereign debt rating in March, predicting that the country’s external revenues and fiscal position would continue to weaken over the coming years.