Oman is considered as one of the fastest-growing Islamic banking markets in the region.
The agreement was signed by Rashad Mohammad Al Zubair, Chairman of OAB, and Saleh Nasser Al Araimi, Chairman of Alizz Islamic Bank Image Courtesy: OAB Official Twitter Page
Oman’s financial sector is witnessing another set towards consolidation as Oman Arab Bank (OAB) and Muscat-based Alizz Bank have entered into a consensus to combine and create a single entity with an asset valuation of $8.31 billion.
Under the agreed terms which had been finalized as a result of 2 years of negotiations, Oman Arab Bank will acquire the total issued share capital of Alizz Bank.
#OmanArabBank and #AlizzIslamicBank signed an agreement for the overall structure of the potential merger between the two banks. This step will pave the way for the successful finalisation of two-years of negotiations between both parties. pic.twitter.com/xg6eCA68DN
— بنك عمان العربي Oman Arab Bank (@Oman_Arab_Bank) June 16, 2020
“If [the process] is completed, AIB will become a wholly-owned Islamic banking subsidiary of OAB and converted into a closed joint-stock company,” Alizz Bank said in an official statement to the Muscat Securities Market.
OAB’s own Islamic brand, Al Yusr, will have its assets and liabilities transferred to Alizz as part of the merger process. OAB, which is an unlisted subsidiary of Oman International Development and Investment Company (Ominvest), will also transform into a public company.
“OAB will continue to operate its conventional banking business and AIB, by then a wholly-owned subsidiary of OAB, will operate its Islamic banking business,” Alizz bank said in its official statement.
Alizz Islamic Bank increased its total assets by 5.3 percent to $1.87 billion in the year to December 31, 2019, but reported a loss of almost $25.9 million for the period. OAB, on the other hand, had assets of $6.49 billion as of December 31, 2019.
According to a recent report from Moody’s Investors Service, Oman remains the fastest-growing Islamic banking market in the region with a growth rate of 10 percent in the first nine months of 2019.
The rating agency said stated that Oman has two standalone Islamic banks and six Islamic windows at conventional banks offering Islamic services and the sector’s market share has climbed from zero to around 15 percent of banking system financing assets as of September 2019, with potential for further growth.
