DUBAI (Reuters) – HSBC Financial institution Oman mentioned 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 (NYSE:) mentioned it had thought-about the letter of intent it obtained from Sohar and had agreed to have interaction in preliminary discussions to acquire extra info on the attainable provide.
“If the events conform to proceed with the merger, it is going to be topic to varied 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 up to now given no particulars of the phrases of its attainable provide, saying solely that its board had determined to discover the potential of a money and shares deal, topic to varied 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 into extra aggressive regionally.
Saudi Arabia’s largest lender Nationwide Industrial Financial institution (NCB) as an example has merged with smaller lender Samba Monetary Group to create Saudi Nationwide Financial institution with over $240 billion in belongings.
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 have been down practically 1%.
HSBC has been working in Oman since 1948.
($1 = 3.7521 riyals)