By Kabeer Yousuf -
MUSCAT — The much-awaited merger of the Oman International Bank (OIB) and the HSBC Oman branch will most likely take effect by June this year, provided all the legal proceedings are in place, according to highly placed sources of both banks. As per the terms of the merger, HSBC will hold 51 per cent of the combined entity and will also infuse $97.4 million in cash from its internal sources.
Signing on the contract to the merger effect at the Muscat Securities Market yesterday, Dr Juma bin Ali Juma, Chairman, OIB said the bank has entered into a landmark agreement with HSBC to create a major new player in the Oman banking sector namely, “HSBC Bank Oman SAOG”.
“This deal is incredibly positive, not just for OIB, but also for our customers who gain access to a leading international network and an increased range of products. HSBC represents the ideal partner with whom to develop the bank’s business model and build on a strong platform for growth. This is an exceptional opportunity with considerable benefits to both banks”, Dr Juma told the media.
He also said that the merger was subject to regulatory and other approvals, including approval by OIB’s shareholders. An Extraordinary General Meeting (EGM) will be convened shortly in this regard and the transaction is expected to complete in the second quarter of 2012. PricewaterhouseCoopers was the lead financial adviser on this transaction.
Allaying the fears of cutting down on manpower, Evan Stirling, CEO, HSBC Oman, who described the merger as ‘a momentous occasion for the bank on its 65th anniversary’, said curtailing the number of employees is not the new entity’s agenda.