Alizz Islamic Bank SAOG said Oct. 4 that it signed a memorandum of understanding with Oman Arab Bank SAOC for their potential merger after obtaining in-principle approval from regulators.

Legal and financial advisers have been appointed to conduct due diligence reviews of both parties.

As part of the MOU, the two Omani lenders agreed that Alizz Islamic Bank will continue to operate as an Islamic banking franchise of the combined entity and will maintain its management autonomy.

Oman Arab Bank is a unit of Oman International Development & Investment Co. SAOG.