HSBC Bank Oman said on Sunday it would hold preliminary talks with local rival Sohar International Bank after the latter last week held out the possibility of a cash-and-shares deal to merge the two lenders.
Sohar has so far given no details of the terms of its possible offer, saying only that its board had decided to explore the possibility of a cash and shares deal, subject to various approvals.
The combination would come amid a consolidation trend in the sector across the Gulf region as profit margins have been squeezed by lower government spending, while banks try to scale up to become more competitive regionally.
HSBC Oman’s market capitalisation was $587 million as of its last closing.
Its shares surged 9.7% on Sunday.