Oman Arab Bank and Alizz Islamic Bank are exploring a merger, joining an increase trend among Gulf banks to consolidate.
Alizz Islamic Bank, with its $200 million market capitalisation, said its board has agreed to proceed and explore this opportunity with Oman Arab Bank.
According to Reuters, Alizz Islamic Bank said its chairman received a letter from the chairman of Oman Arab Bank requesting that the two banks explore the possibility of strategic collaboration that may lead to an eventual merger of the two lenders.
Ominvest and Arab Bank Group are key shareholders of unlisted Oman Arab Bank.
Consolidation in the sector across the Gulf region has increased in the past two years as profit margins have been squeezed by lower government and consumer spending in the face of weak oil prices.