Merger talks between Oman’s Bank Sohar and Bank Dhofar to create a lender with assets of USD16bn have collapsed. Talks ended after the banks were unable to reach an agreement on “certain key issues relating to the proposed merger,” Bank Dhofar said in a statement to the Muscat stock exchange today, without giving further details. The decision to walk away from the merger comes four months after the banks agreed terms of the share-swap ratio for the deal. Each Bank Dhofar share would have been exchanged for 1.29 shares of Bank Sohar, Bank Sohar said in in June. We believe this news is more negative to Bank Sohar than Bank Dhofar (Bloomberg, Murad Ansari)   Bank Dhofar: OMR0.22 as of 16 October 2016, Rating: Neutral, FV: OMR0.21/share, MCap: USD1,090mn, BKDB OM / BDOF.OM Bank Sohar: OMR0.16 as of 16 October 2016, Rating: Neutral, FV: OMR0.17/share, MCap: USD663mn, BKSB OM / BKSB.OM