MUSCAT - A plan to merge National Bank of Oman (NBO) with Bank Muscat was yesterday endorsed in principle by the Capital Market Authority (CMA), the Sultanate's stock exchange watchdog, saying that the move would lead to the creation of a 'significant financial entity.'
The boards of directors of the two largest banks in the Sultanate had last week unanimously approved the merger plan, due to come into effect on January 1, 2005.
"The CMA is glad to forward its 'in principle' approval to the proposal put forth by the board of directors of the two leading financial institutions," Yahya bin Said Al Jabri, President of the Authority, said. CMA's approval is subject to the proposal being ratified by Central Bank of Oman (CBO) and the Ministry of Commerce and Industry in accordance with the Commercial Companies Law.
"The merger of Bank Muscat and National Bank of Oman, we are sure, will create a significant financial entity that will be far better equipped to meet the needs of an emerging market, provide much better value to its stakeholders, and compete on par with some of the finest banks across the AGCC region, which shows every sign of becoming one of the fastest growing and most competitive regions across the world," Jabri said.
Bank Muscat chairman, Shaikh AbdulMalik bin Abdullah Al Khalili said he was 'extremely glad' to receive CMA's green signal.
"This is a major step forward in the proposed integration of the two banks. The approval of the CMA only re-affirms the significance of the unanimous support that the merger proposal received from the boards of both banks," he added.
He also said the initial response from CBO had also been "very encouraging," adding: We are hopeful of receiving a favourable response from the Central Bank any time now."
The merged entity, which will continue under the name of Bank Muscat, will command significant stature across the region with a combined asset base of $6.65 billion and an overall AGCC-wide ranking of 22, compared with the present 28. Commenting on the effect the merger will have on the management team of both banks, Shaikh AbdulMalik said it would be premature to say anything in this regard at the moment, but said: "We are firmly of the belief that the success of a merger lies in being able to successfully integrate the two operations."
FROM RAVINDRA NATH
© Khaleej Times 2004
