Global banking giant HSBC has announced that the Oman branch of its Middle-Eastern subsidiary is to merge with the country's fifth-largest bank, Oman International Bank (OIB), in an attempt to expand its presence in a 'key Gulf economy'.
HSBC Bank Middle East will retain a 51% interest in the new combined entity - to be called HSBC Bank Oman SOAG - and will inject additional capital of up to $97.4m cash into HSBC Oman.
OIB, which has the second-largest branch network in Oman, had gross assets of $3.2bn at the end of 2011. Meanwhile, HSBC Oman had gross asset of $2.5bn.
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"It is rare to get the opportunity to create a bank of such scale in a key target market," said Simon Cooper, the Chief Executive of HSBC Middle East and North Africa, in a conference call. "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."
In a company statement, Cooper said that the company recognises "the tremendous business opportunities in Oman."
As is the case with most mergers of this nature, the transaction is subject to regulatory and OIB shareholder approval but HSBC expects it to be completed in the second quarter of 2012.
HSBC's shares were down 0.09% at 553.6p by 15:41 in London.
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