Essay on Management

858 Words4 Pages
THE MERGE OF OMAN BANK AND HSBC

Introduction:

The year 2012 was historical for the Sultanate of Oman, as HSBC bank’s operations in Oman, represented by HSBC Middle East Ltd, and joined forces with Oman International Bank to become a major player in Oman’s evolving banking sector. The merger was completed in June 2012 and the new entity, HSBC Bank Oman SAOG, was born, bringing with it a wealth of knowledge and experience. (Muscat Daily, June 3, 2012, p-2)
Let us analyse what were strategic capabilities of HSBC and OIB which made it viable for the merger and whether the objectives of the merger were achieved. If not, what strategy the merged entity should adopt to derive the intended benefits of the merger.
The objective of this
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Hence it was a win-win proposition for both HSBC and OIB to merge to draw synergies from the strength of both, HSBC’s technology, global reach and product innovation and OIB’s domestic reach and strong customer base.
Under the terms of the merger, HSBC Middle East will inject an additional capital of US$97.4m into HSBC Oman and in turn, OIB issued to HSBC new shares equivalent to 51 per cent of the shareholding in the combined entity.
Though there were synergies and the merger provided gains, there were certain challenges. The organisational culture, customer profile, business segment, banking products and technology in place were totally different. All these require adoption of suitable change management strategy.
The technological challenge of bringing 400,000 retail customers and 10,000 corporate clients of more than 80 branches under one unified banking platform and connecting more than 140 ATMs to the OmanNet National Switch Network were completed by the bank well ahead of its scheduled target. In addition, issue of fresh ATM/Debit cards to ex-OIB customers were achieved in record time.
HSBC Bank Oman also made changes in the business process by making a number of lending policy changes to benefit its customers, rolled out complimentary life insurance on personal loans, launched receivables finance besides providing value added services like on-the-ground
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