Sohar International Bank and Ahli Bank Oman announced on 7 April 2025 that they had signed a letter of intent to explore a merger, a transaction that if completed would create one of Oman's largest banking groups by total assets. The combined institution would hold approximately OMR 11.1 billion, equivalent to around $28.84 billion, placing it among the leading lenders in the Sultanate and significantly expanding both banks' individual scale and competitive capacity within the Omani financial sector.
Under the structure set out in the letter of intent, Sohar International would absorb all of Ahlibank's assets and liabilities, with the merged entity continuing to operate under the Sohar International name. The two banks agreed to enter an exclusivity period to allow for detailed due diligence, during which they have committed to not pursuing discussions with other potential merger partners. The exclusivity arrangement provides both institutions with the space to conduct a thorough financial, legal, and operational assessment of the proposed combination before any definitive commitments are made.
DEAL STRUCTURE AND APPROVAL REQUIREMENTS
The proposed merger is at an early stage and remains subject to the completion of due diligence, the negotiation and signing of a binding merger agreement, and the receipt of approvals from the boards and shareholders of both Sohar International and Ahlibank. Regulatory clearance from Oman's banking and financial authorities will also be required before the transaction could proceed to completion. The letter of intent does not create binding obligations on either party in respect of the final transaction, and both banks acknowledged that the proposed terms could be subject to modification or withdrawal depending on the findings of the due diligence process.
The announcement of the letter of intent and the agreed exclusivity period signals that both boards have concluded that a combination is worth serious exploration and that the broad parameters of the proposed structure are acceptable as a starting point for negotiations. The formal processes required for a bank merger of this nature in Oman involve multiple stages of regulatory and shareholder engagement, and the current announcement represents the first public step in what is likely to be an extended process before any transaction is finalised.
CONSOLIDATION MOMENTUM IN OMAN'S BANKING SECTOR
The proposed Sohar International and Ahlibank tie-up reflects the broader consolidation dynamic that has been building in Oman's financial sector, where authorities have signalled support for the creation of larger and better-capitalised banking institutions capable of supporting the country's economic diversification programme and competing effectively with larger regional peers. Combining the balance sheets of two mid-sized lenders can improve funding efficiency, enhance capital ratios, strengthen lending capacity, and reduce the overall cost base through the elimination of overlapping functions and infrastructure.
For Sohar International, absorbing Ahlibank would represent a material and transformative expansion of its balance sheet and client franchise. Oman's banking sector has seen consolidation activity in previous years, and the Sohar-Ahlibank combination, if completed, would represent one of the more significant mergers in the market's recent history. The transaction also reflects the wider pattern across the Gulf Cooperation Council region, where bank consolidation has been actively encouraged by regulators and governments as a means of strengthening the financial sector's resilience and capacity to fund national economic objectives.