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Wed 14 May 2014 04:09 PM

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Oman's Bank Sohar plans to issue $181m bond

Bank, which is in talks to merge with rival Bank Dhofar, says bond will boost its capital reserves

Oman's Bank Sohar plans to issue $181m bond

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.

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