United Finance Company and Taageer Finance Company have agreed to explore the possibility of a ‘strategic collaboration’ between the two non-banking finance companies.
Last week, the board of directors of United Finance approved a proposal that the company may enter into discussions with Taageer Finance to explore a possible strategic collaboration between the two companies. Taageer Finance’s board reviewed the communication received from United Finance on strategic collaboration and has appointed a working group committee to engage in an initial review with United Finance.
In their disclosures filed to the Muscat Securities Market, the companies have not indicated whether the proposed possible strategic collaboration may lead to an eventual merger of the two entities.
‘Any such collaboration would be subject to requisite shareholders’ and regulatory approvals. Further disclosure concerning this matter will be made as and when there are developments to report,’ Taageer Finance said in its disclosure.
United Finance in its disclosure on Sunday said that it received a letter from Taageer Finance confirming their interest in exploring a possible strategic collaboration and also advising names of their working group committee members. United Finance’s board also agreed to appoint directors to the working group and engage in the initial view with Taageer Finance.
Oman’s non-banking finance companies are currently operating under the challenging market conditions created by intense competition with banks, higher funding costs, tight liquidity and dwindling margins.
Taageer Finance last week reported a net profit of RO2.74mn for the nine months period ended September 30, 2019 compared to RO1.71mn net profit reported for the same period of 2018.
The company’s net leasing portfolio grew 15.6 per cent to RO193.67mn as of September 30, 2019 compared to RO167.53mn a year ago.
On the other hand, United Finance recorded a net profit of RO317,000 for the period ended September 30, 2019 as against RO305,000 net profit in the corresponding period of last year. The company’s loan portfolio stood at RO98.86mn as of September 30, 2019 compared with RO101.47mn as of the end of December 2018.
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