Oman Arab Bank, Alizz Islamic explore merger

Alizz said its board has agreed to proceed and explore this opportunity with Oman Arab Bank. (Courtesy Oman Arab Bank)
Updated 24 May 2018
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Oman Arab Bank, Alizz Islamic explore merger

LONDON: Oman Arab Bank has initiated merger talks with fellow Muscat-based Alizz Islamic Bank, as consolidation among GCC lenders continues amid sluggish economic conditions.
Oman Arab Bank, a subsidiary of investment holding company Ominvest, said on Thursday it had approached Alizz Islamic Bank earlier this week, requesting that the two banks “explore the possibility of a strategic collaboration that may lead to an eventual merger of the two entities,” Ominvest said in statement on the Muscat securities market.
Alizz, in a separate stock market statement, said it had “agreed to proceed and explore this opportunity with Oman Arab Bank.”
Alizz shares surged 3.9 percent on the news yesterday. Shares in Ominvest — whose other holdings include investment bank U Capital and Oman Real Estate Investment Services — were unchanged.
The merger talks between the banks come amid weak economic conditions in Oman, which have hit local lenders hard.
Moody’s Investors Service downgraded the sultanate’s sovereign debt rating in March, predicting that the country’s external revenues and fiscal position would continue to weaken over the coming years.
Declining oil revenues have obliged Muscat to cut spending and privatize some state assets, but such measures would have only a limited impact on the country’s finances, according to Moody’s.
Fitch Ratings last July cut the outlook on five Omani banks — Bank Muscat, HSBC Bank Oman, Ahli Bank, Bank Dhofar and Bank Sohar — to negative.
But the agency said it believed that authorities still had the ability and willingness to step in to support banks if need be.
“We believes the Omani authorities’ willingness to support domestic banks remains high, partly because of high contagion risk (small number and high concentration of banks in the system) and the importance of the banking system in building the local economy,” the agency said at the time.
Oman’s Bank Dhofar — the country’s second largest lender by assets — began merger talks with Bank Sohar in 2013, but negotiations were abandoned in October 2016 after the institutions failed to agree terms.
The merger talks between Oman Arab Bank and Alizz follows similar tie-ups in recent years by banks in Abu Dhabi, Qatar and Bahrain, as part of national economic consolidation programs coming in the wake of lower oil prices.
FGB and NBAD of Abu Dhabi completed a merger last year to form First Abu Dhabi Bank (FAB), the UAE’s largest by assets, in a move widely seen as being encouraged by Abu Dhabi’s government, which had close links to both banks.
Qatari lenders Masraf Al-Rayan, Barwa Bank and International Bank of Qatar began three-way merger talks in 2016. Bloomberg reported last mont that the deal, which was originally slated for completion last year, had stalled over price.
Saudi lenders Saudi British Bank (SABB) and Alawwal Bank last agreed to merge, in a move that would create the Kingdom’s third-biggest lender with assets of around $77 billion.
Analysts played down the impact of economic pressures on the merger, saying it was more to do with the desire of Alawwal shareholder RBS to exit the Saudi market.


Australian court fines Apple $6.7 million over iPhone ‘bricking’ case

Updated 39 min 26 sec ago
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Australian court fines Apple $6.7 million over iPhone ‘bricking’ case

SYDNEY: An Australian court fined US electronics giant Apple Inc. A$9 million ($6.7 million) on Tuesday after a regulator accused it of using a software update to disable iPhones which had cracked screens fixed by third parties.
The Australian Competitor and Consumer Commission (ACCC) sued the world’s biggest company by market value for “bricking” — or using a software update to disable — hundreds of smartphones and tablet devices, then refusing to unlock them if the devices had been serviced by non-Apple repairers.
On Tuesday the Australian Federal Court found in the regulator’s favor, saying Apple had breached the country’s consumer law by telling some 275 customers they were not eligible for a remedy if their device had been repaired by a third party.
“The mere fact that an iPhone or iPad had been repaired by someone other than Apple did not, and could not, result in the consumer guarantees ceasing to apply,” ACCC Commissioner Sarah Court said in a statement.
“Global companies must ensure their returns policies are compliant with the Australian Consumer Law, or they will face ACCC action,” Court said.
An Apple spokeswoman said in an email the company had “very productive conversations with the ACCC about this” without commenting further on the court finding.
The ACCC said after it told Apple about its investigation, the US company sought to compensate customers whose devices were made inoperable by the software update, known as “error 53.” So far, Apple had contacted about 5,000 customers, the ACCC said.
Apple has also offered to improve staff training, information about warranties and consumer law on its website, and processes to ensure compliance, the ACCC said.