Bank, which is in talks to merge with rival Bank Dhofar, says bond will boost its capital reserves
Oman's Bank Sohar, in talks to merge with larger rival Bank Dhofar, plans to issue a OR70 million ($181.8 million) mandatory convertible bond to boost its capital reserves, it said on Wednesday.
The issue, which will be done as a private placement, will help boost the bank's Tier 1 - or core - capital, the lender said in a bourse filing. It did not provide any other details.
Bank Sohar's Tier 1 ratio was 9.85 percent at the end of the first quarter, with its total capital adequacy ratio - combined Tier 1 and Tier 2 (or supplementary) capital - at 13.28 percent, according to its financial statement.
By comparison, the median Tier 1 capital ratio in the Omani banking system was 11.97 percent at the end of 2013, according to Thomson Reuters data.
Last month, Bank Sohar reported a 31 percent year-on-year jump in first-quarter net profit.
It has been in discussions with Bank Dhofar since the middle of last year about a merger that will create Oman's second-largest lender.