Dubai: HSBC Bank Middle East Ltd (HSBC) announced yesterday that it has entered into an agreement with Oman International Bank (OIB) to merge its Oman branch (HSBC Oman) with OIB.
Following the merger, HSBC will hold 51 per cent of the combined entity which will be renamed HSBC Bank Oman.
OIB, which is Oman's fifth largest bank with the second largest branch network in the country, had gross assets of $3.2 billion (Dh11.75 billion) as at the end of 2011. The merger will not affect OIB's listing on the Muscat Securities Market. Under the terms of the merger, HSBC will inject additional capital of up to $97.4 million in cash from its internal resources into HSBC Oman and the business of HSBC Oman will then be merged with OIB, HSBC said in a statement.
As of December 31, 2011 HSBC Oman had gross assets of $2.5 billion. The HSBC Group will provide certain support services to HSBC Bank Oman under a services agreement with an initial term of 10 years.
"This transaction presents HSBC with a great opportunity to invest for growth in a key Gulf economy. With over 60 years' presence in the country, we recognise the tremendous business opportunities in Oman," said Simon Cooper, Deputy Chairman and Chief Executive Officer of HSBC in the Middle East and North Africa.
Last month HSBC Bank Middle East acquired the onshore retail and commercial banking business of Lloyds Banking Group (Lloyds) in the UAE.
Both these merger agreements are subject to regulatory and other approvals, including approval of OIB's shareholders.
