Moody’s said that the potential merger of Oman Arab Bank (OAB) and Alizz Islamic Bank would be credit positive for OAB and would have total assets worth $7.6 billion.
In a statement, Moody’s noted that the successful completion of the proposed merger would provide OAB with a larger Islamic franchise and asset base, allowing it to improve its interest income and deposit-gathering ability.
OAB, with a seven per cent market share in terms of total assets (conventional and Islamic), is larger than Alizz, at two per cent. However, Alizz has a larger share of the Islamic assets market at 15 per cent as of the end of 2017 compared with two per cent for OAB.
In their MoU, the duo agreed that Alizz would continue to operate as a dedicated Islamic banking franchise with management autonomy which, according to Moodys, would help preserve Alizz’s customer relationships.
Alizz Islamic Bank signed a MoU with OAB for the potential merger following in-principal approval from the regulatory bodies.
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