HSBC Middle East has agreed to merge its Oman branch with Oman International Bank (OIB), the country’s fifth largest bank, HSBC said in a statement on Wednesday.
HSBC will hold 51 per cent of the combined entity, which will be re-named HSBC Bank Oman SOAG. OIB will issue to new shares to HSBC equivalent to its stake in the combined entity, it said.
European lender HSBC will inject $97.4 million in cash from its internal resources to its Oman branch before the merger.
“It is rare to get the opportunity to create a bank of such scale in a key target market,” Reuters reported Simon Cooper, CEO of HSBC MENA as saying.
“The ability to grow organically in Oman is there, but it would take an awfully long time to get to the scale of Oman International Bank. I am not predicting job losses,” he said.
The HSBC Group will provide certain support services to the new bank under an initial ten-year services agreement.
OIB had gross assets of $3.2 billion and HSBC Oman had gross assets of $2.5 billion at the end of December 2011. The merger will not affect OIB’s listing on the Muscat Securities Market, the statement said.