HSBC Oman to hold talks on possible merger offer from Sohar International

DUBAI (Reuters) – HSBC Financial institution Oman stated on Sunday it will maintain preliminary talks with native rival Sohar Worldwide Financial institution after the latter final week held out the potential of a cash-and-shares deal to merge the 2 lenders.

In a press release the unit of UK-based HSBC Holdings stated it had thought of the letter of intent it acquired from Sohar and had agreed to interact in preliminary discussions to acquire extra info on the doable provide.

“If the events comply with proceed with the merger, it will likely be topic to numerous situations together with … approval of the related regulatory authorities and of the shareholders on the extraordinary normal meeting of every financial institution,” it added.

Sohar has thus far given no particulars of the phrases of its doable provide, saying solely that its board had determined to discover the potential of a money and shares deal, topic to numerous approvals.

Any mixture would come amid a consolidation pattern within the sector throughout the Gulf area as revenue margins have been squeezed by decrease authorities spending, whereas banks attempt to scale as much as turn out to be extra aggressive regionally.

Saudi Arabia’s largest lender Nationwide Industrial Financial institution (NCB) for example has merged with smaller lender Samba Monetary Group to create Saudi Nationwide Financial institution with over $240 billion in property.

Abu Dhabi has additionally seen two main financial institution mergers.

HSBC Oman’s market capitalisation was $587 million as of its final closing. Its shares surged 9.7% on Sunday. Sohar’s market worth is almost $816 million, primarily based on Refinitiv Eikon information. Its shares had been down practically 1%.

HSBC has been working in Oman since 1948.

($1 = 3.7521 riyals)

(Reporting by Saeed Azhar; Enhancing by David Holmes)