DUBAI: Omani Islamic lender Bank Nizwa hopes to complete a merger with United Finance Co. in 2015 as it aims for faster growth in the country's crowded banking sector, the bank's chief executive told Reuters on Thursday.
The potential deal is the latest sign of consolidation after the start of merger talks in 2013 between Bank Dhofar and Bank Sohar.
Oman's financial regulator has been looking at ways to limit the number of lenders in the country; at present, there are around 18 banks for a population of 4 million people.
"The regulators would like to see some consolidation. But our incentive is to grow quicker," said Jamil Al-Jaroudi. Bank Nizwa is Oman's eighth largest lender by assets.
"We hope it will come to fruition in 2015. We are a new bank and when you think strategically, it allows you to grow more quickly."
The last banking merger to be completed in Oman was in 2012, between the local business of HSBC Holdings and Oman International Bank.
United Finance, which offers loans and leasing services as well as corporate deposits, said at the start of this week that it had agreed in principle to merge with Bank Nizwa and would consider the proposal when its board next met.
Bank Nizwa, which started operations in 2013 and is one of Oman's two full-fledged Islamic banks, has a market capitalization of $316 million, according to Thomson Reuters data. United Finance has a capitalization of $107 million.
Oman's fledgling Islamic finance industry is expected to receive a boost when the government implements plans to issue its first sovereign sukuk. Minister for Financial Affairs Darwish Al-Balushi said in October that might happen in the first quarter of 2015.
But Al-Jaroudi said on Thursday that the issue, expected to be 200 million rials ($520 million), might be pushed back from the first quarter following the plunge of oil prices.
"Everyone was overwhelmed by what happened with oil prices so it may have been delayed a little bit, and I don't know when it will be — but it will be in 2015," he said.
Standard & Poor's earlier this month lowered Oman's sovereign debt rating to "A-/A-2", citing the impact of lower oil prices.
Oman's oil resources are not as vast as some of its bigger Gulf neighbors and it lacks their hefty fiscal reserves. State spending in 2015 is projected to leave a deficit of around 8 percent of gross domestic product.
Bank Nizwa aims for 2015 merger with United Finance
Bank Nizwa aims for 2015 merger with United Finance
US trade policy uncertainty sees muted response from markets
RIYADH: President Donald Trump renewed his condemnation of the US Supreme Court on Monday after it ruled against his sweeping tariff program last week, vowing to turn to other powers and licenses but giving no details.
The Supreme Court, in a 6-3 ruling on Friday, voided most of the tariffs Trump imposed in 2025, finding that the emergency law he relied on did not allow the imposition of the levies.
Trump said on Saturday he would raise a temporary tariff from 10 percent to 15 percent on US imports from all countries, the maximum level allowed under the law, a day after the court ruled he had exceeded his presidential authority when he imposed an array of higher rates under an economic emergency law.
"The court has also approved all other Tariffs, of which there are many, and they can all be used in a much more powerful and obnoxious way, with legal certainty, than the Tariffs as initially used," he wrote in a social media post.
US stock index futures slipped on Monday as traders reacted to the latest twist in the US’s economic policy.
At 12noon GMT, Dow E-minis were down 162 points, or 0.33 percent, Nasdaq 100 E-minis were down 129 points, or 0.51 percent, and S&P 500 E-minis were down 23.75 points, or 0.34 percent.
Most megacap and growth stocks were lower in premarket trading, though Alphabet bucked the trend with a 0.3 percent gain after rising around 4 percent on Friday.
“It’s really hard from a business standpoint when you are at a company to know how do you plan if you’re not even sure about suppliers, supply chains and what the tariffs are going to look like,” said Arthur Laffer Jr., president of Laffer Tengler Investments, according to Reuters.
“That’s a huge concern for corporate America and why it was really important to get that hammered out and ironed out as fast as possible, so that companies know what the playing field really looks like, and they can plan accordingly,” he added.
All three main stock indexes clocked weekly gains on Friday as markets took the Supreme Court’s decision in stride, with the Nasdaq snapping a five-week losing streak.
Other stock markets across the world greeted the latest wave of uncertainty with a muted response.
In the Gulf region, Saudi Arabia’s main market — which had been closed on Sunday due to a national holiday — ended the day up 0.34 percent.
Dubai’s main share index closed up 1.82 percent, led by a 3.64 percent gain in blue-chip developer Emaar Properties and a 2.92 percent leap in Emirates NBD Bank.
In Abu Dhabi, the index ended the session up 0.55 percent, with Americana Restaurants International leading the gainers with its share price surging 7.73 percent.
Qatar’s index closed up 1.08 percent, driven by banking shares, including a 0.43 percent uptick in Qatar National Bank, the region’s largest lender.
Other global markets faced a mixed picture, with the UK's FTSE 100 subdued on Monday.
The blue-chip index was up 0.1 percent at 12:00noon GMT, after closing at record highs last week. For the UK, the tariff rate has increased from 10 percent to 15 percent,
Unicredit analysts noted, following Trump's latest announcement.
Vijay Valecha, chief investment officer at Century Financial said the possible US tariff increase from 10 percent to 15 percent “ has brought trade tensions back into focus, tempering the optimism seen after the recent Supreme Court tariff ruling.”
He added: “Markets are now reassessing the economic impact of higher import costs, possible retaliation from trade partners, and the broader implications for global growth.”
