HSBC set to merge Oman business with local bank

HSBC is to merge its business in Oman with Oman International Bank (OIB) and hold a majority stake in the enlarged operation, Europe's biggest bank said on Wednesday. HSBC will hold 51 percent of the combined group, to be named HSBC Bank Oman. OIB is Oman's fifth largest bank with the second largest branch network in the country, with gross assets of $3.2bn. The merger will not affect OIB's listing on the Muscat Securities Market, the bank said in a statement. Under the terms of the merger, HSBC will inject additional capital of up to $97.4m in cash from its internal resources into HSBC Oman and the business of HSBC Oman will then be merged with OIB. Simon Cooper, deputy chairman and CEO of HSBC in the Middle East and North Africa, said: "This transaction presents HSBC with a great opportunity to invest for growth in a key Gulf economy. With over 60 years' presence in the country, we recognise the tremendous business opportunities in Oman." The merger is subject to regulatory and other approvals, including approval by OIB's shareholders, and is expected to completed in the second quarter of 2012. HSBC is pulling back from countries where it is unprofitable or lacks scale and restructuring operations elsewhere, and has been reviewing its Middle Eastern operations.