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

HSBC emblem is seen on a department financial institution within the monetary district in New York, U.S., August 7, 2019. REUTERS/Brendan McDermid

DUBAI, June 19 (Reuters) – HSBC Financial institution Oman (HBMO.OM) mentioned on Sunday it will maintain preliminary talks with native rival Sohar Worldwide Financial institution (BKSB.OM) after the latter final week held out the opportunity of a cash-and-shares deal to merge the 2 lenders.

In a press release the unit of UK-based HSBC Holdings (HSBA.L) mentioned it had thought of the letter of intent it acquired from Sohar and had agreed to interact in preliminary discussions to acquire extra data on the potential provide.

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

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

Any mixture would come amid a consolidation development 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 greatest lender Nationwide Industrial Financial institution (1180.SE) (NCB) as an illustration 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 sort of $816 million, based mostly on Refinitiv Eikon knowledge. Its shares had been down almost 1%.

HSBC has been working in Oman since 1948.

($1 = 3.7521 riyals)

Reporting by Saeed Azhar; Enhancing by David Holmes

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