Oman’s second-largest bank pursues merger with smaller rival

Dubai (AP) — Oman’s second-largest bank is pursuing a potential merger with its smaller rival, potentially creating a lender with just under $20 billion in assets, according to regulatory filings made on Tuesday.

The filings on the Muscat Stock Exchange show Bank Dhofar’s interest in its smaller rival, Ahli Bank. Bank Dhofar has over $11 billion in assets, while Ahli has under $8 billion.

Ahli said it would study Bank Dhofar’s offer. Bahrain’s Ahli United Bank owns over a third of Oman’s Ahli Bank.

Stock in Bank Dhofar rose over 3% in trading Tuesday on the Muscat Securities Market, to more than 40 cents a share.

The sultanate of Oman sits on the eastern edge of the Arabian Peninsula. While a smaller oil producer than other Gulf Arab states, analysts expect Oman to use higher crude prices to bring down its budget deficits. Ratings firm Fitch noted in December that Bank Dhofar “remains highly dependent on government spending.”