Oman’s Ahli Bank receives revised merger offer from Bank Dhofar amid Omnivest interest

Bank Dhofar, Oman’s second-biggest lender by market value, has revised its non-binding merger offer for Ahli Bank a day after Oman International Development and Investment Company (Omnivest) announced its intention to bid for the lender.

“The board of directors of the bank will study the received non-binding offer [from Bank Dhofar] and any material developments in this regard will be announced in due course,” Ahli Bank said in a statement to the Muscat Securities Market, where its shares are traded.

Last month, Ahli Bank received a merger offer from Bank Dhofar, which manages more than 4.4 billion Omani rials ($11.43 billion) in total assets. However, Ahli Bank’s board of directors rejected the offer that would have created an entity with nearly $19 billion in assets.

Bank Dhofar reported strong results last year with its net profit climbing 36 per cent to 34.1 million rials on the back of higher income from net interest and Islamic financing.

Set up in 2007, Ahli Bank is partly owned by Bahrain’s Ahli Bank and operates 23 branches in Oman. It offers retail, commercial and investment banking solutions. The bank’s net profit jumped nearly 20 per cent to 33 million rials last year on the back of lower impairment losses and higher net interest income.

It had assets worth 3 billion rials at the end of last year.

On Tuesday, Muscat-based Omnivest submitted a letter of intent to acquire Ahli Bank’s entire issued capital and subsequently merge the bank with Oman Arab Bank.

“The board of directors of the bank are considering the letter of intent and will make the relevant disclosures in due course in accordance with the applicable laws and regulations,” Ahli Bank said in a statement.

Omnivest, whose total assets stood at $3.4 billion as of the end of 2022, reported an almost 70 per cent annual increase in its revenue to 336.8 million rials last year while net profit attributable to shareholders surged by 85.2 per cent to 50 million rials.

Oman’s banking sector has seen more consolidation in recent months.

This year, HSBC Bank Oman received regulatory approval for its proposed merger with Sohar International Bank.

As part of the deal, first announced in November last year, all the assets and liabilities of HSBC Oman will be transferred to Sohar International.