Oman Arab Bank has agreed to make an offer to the shareholders of Muscat-based Alizz Islamic Bank to acquire its entire issued share capital.
In a filing with the Muscat Securities Market on Tuesday (June 16), Oman Arab Bank said Alizz will become its wholly-owned Islamic banking subsidiary and converted into a closed joint stock company.
Oman Arab Bank’s current Islamic banking window, Al Yusr, will transfer its assets and liabilities to Alizz following the completion of the acquisition.
Oman Arab Bank will then be converted into a public joint stock company.
Oman Arab’s acquisition of Alizz will result in a bank holding 3.2 billion rials ($8.32 billion) in assets.
At the end of last year Oman Arab Bank held 2.5 billion rials in assets. The conventional bank reported profit of 32.56 million rials ($84.56 million) in 2018, up 8% from 2018.
Alizz Islamic Bank in 2019 held 718.83 million rials in assets from 682.81 million rials in 2018. It made a loss of 9.95 million rials from a profit of 2 million rials in 2018.
This merger is the latest in the Gulf Cooperation Council (GCC) to move forward. Most recently, Dubai Islamic Bank completed its acquisition of Noor Bank and Kuwait Finance House in April said its deal to acquire Bahrain’s Ahli United was temporarily suspended because of the disruption of work activities due to the COVID-19 pandemic.
Oman currently has two standalone Islamic banks—Bank Nizwa and Alizz Islamic Bank—and six Shariah-compliant windows. They held 4.9 billion rials ($12.73 billion) in assets in April, making up around 14% of the banking system’s assets, according to central bank data.
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