MUSCAT, 4 January 2005 — BankMuscat and National Bank of Oman (NBO), Oman’s two leading banks, declared yesterday that the much talked about “mega-merger” would now take place in the first quarter of this year.
An senior official at BankMuscat, which is set to become a $6.65 billion entity after the merger, told Arab News that NBO has agreed to the appointment of KPMG, a leading international accounting firm, as the independent auditor that will assess the “reasonableness of the provisions made by NBO in its books of accounts as of Dec. 31, 2004 instead of Sept. 30, 2004, as originally agreed”.
“The hurdles, if any, have been removed to ensure a smooth and transparent merger to the satisfaction of both the banks and their shareholders”, said the official.
The doubts about the merger were raised when NBO, Oman’s second largest bank, sought postponement of the merger which was to take place on Jan. 1, 2005, in its letter to the Capital Markets Authority, the sultanate’s capital market watchdog for the merger. “At present, we have certain pending issues for which we are in discussions with BankMuscat and we are also in the process of finalizing the appointment of an independent auditor”, said the letter.
The BankMuscat official said “A series of meetings with NBO have led to the streamlining of all pending issues between the two banks including the appointment of the independent auditor”. Sources close to NBO said, “Following the acceptance of the independent auditors report to be presented to BankMuscat, both banks would call for an extraordinary general meeting (EGM) for shareholders’ approval”.
A joint statement issued yesterday quoted Sheikh AbdulMalik ibn Abdullah Al-Khalili, chairman, BankMuscat as saying, “Though we were extremely keen to complete all merger formalities by the beginning of the year, the revision in timelines, and earlier proposed formulae, is only logical given the fact that we are already at the close of the last financial year. The change in approach is also expected to significantly enhance shareholder’s confidence as shareholders of both banks will now be far better informed when the merger proposal is put before them for approval.”
Speaking on the new road map leading up to the merger, Sheikh Suhail Bahwan, NBO chairman said: “Both BankMuscat and NBO have always had the best interests of their stakeholders at heart. The new approach, we believe, will significantly reaffirm our belief in the eyes of our shareholders that the merger will result in the creation of a significant banking entity that will be capable of providing far more shareholder and stakeholder value than before. We are glad that the merger proceedings look well poised to gather momentum and soon come to a logical conclusion.”
The merger deal, initiated last September has been okayed by the Central Bank of Oman and the Capital Markets Authority and the board of directors of the two banks and remains to be approved by the shareholders and Ministry of Commerce & Industry, in accordance with the Commercial Companies Law of Oman.