Ahlibank's board of directors has approved a rights issue of RO25mn and the acquisition of Middle East Brokerage Company (MEBC), as the bank looks to fund expansion and launch an investment brokerage arm.
Speaking to Muscat Daily, Abdulaziz al Balushi, the chief executive officer of Ahlibank, said the bank is entering a new phase for which it needs more capital to support growth and expansion.
He said, "We feel that it is the right time to enter the investment banking space, along with Islamic banking.
"There is going to be a lot of activity this year in terms of business growth and expansion in both conventional as well as Islamic banking, for which we need more capital.
"There will be a lot of investment banking activity after the launch of Islamic banking. However, our capital adequacy ratio is quite strong and above 16 per cent, which is much higher than the Central Bank of Oman's (CBO) stipulated requirement of 12 per cent."
Balushi added that the bank's capital base, which is currently RO80mn, will increase to RO105mn after the rights issue. The bank will issue 250mn shares at 100bz per share to existing shareholders.
However, both the rights issue and the acquisition of MEBC are subject to necessary regulatory and shareholder approvals.
CBO had recently announced, that the minimum capital requirement for Islamic banking window operations is RO10mn for conventional banks.
Brokerages in Oman are passing through one of their most difficult periods as low trading volumes and lacklustre regional markets eat into their profits.
© Muscat Daily 2012
