Sohar International Bank and Ahli Bank SAOG have postponed their planned merger after failing to secure required regulatory approvals, the two lenders confirmed on Monday.
The decision ends efforts to create what would have been Oman’s largest banking entity, with combined assets of nearly $30 billion. The merger, first announced in April, would have positioned the new entity ahead of Bank Muscat in terms of total assets.
In a disclosure to the Muscat Stock Exchange, Ahli Bank stated that it will proceed with a rights issue valued at OMR 50 million ($130 million). The capital increase had been suspended during merger negotiations but was originally announced in March as part of the bank’s capital adequacy strategy.
Ahli Bank stated that the additional capital will support its growth plans and capital objectives. Details on the structure and timeline of the rights issue will be disclosed following necessary approvals.
Sohar International did not issue a separate statement at the time of writing, and neither bank provided further comment on the regulatory hurdles that led to the suspension of the transaction.
The move marks a reversal in a wave of consolidation efforts across the Gulf banking sector, where lenders have been seeking to improve scale and efficiency amid growing regulatory requirements and digital transformation costs. While several merger deals have proceeded in markets such as the UAE, Saudi Arabia, and Qatar, others, including the 2020 talks between Oman Arab Bank and Alizz Islamic Bank, have faced delays or cancellations.
Sohar International last completed a significant transaction in August 2023 with the acquisition of HSBC Bank Oman, a move that expanded its branch network and deposit base. That deal was approved by the Central Bank of Oman and other relevant authorities following a shareholder vote in June 2023.
Oman’s banking sector is undergoing gradual structural reforms, with a focus on capital strengthening, governance enhancements, and improved risk management frameworks. The Central Bank of Oman has also been encouraging digital innovation and financial inclusion, which has added pressure on smaller banks to scale or seek strategic partnerships.
As of 2024, Bank Muscat remains the largest commercial lender in Oman by assets, followed by Sohar International. Ahli Bank holds a smaller market share but has been expanding its digital services and lending portfolio in recent quarters.
