Bank Dhofar, Oman's second-largest bank by assets, won shareholder approval for plans to raise its capital by as much as $300 million, including through the issuance of capital-boosting bonds, it said on Saturday.

The lender said shareholders attending a meeting on Feb. 26 unanimously backed plans to issue bonds with a perpetual tenor which would enhance the bank's Tier 1, or core, capital.

Should Bank Dhofar sell a Tier 1 bond, it would be the first such issue by an Omani bank.

However, the format still needs approval from the sultanate's central bank and Bank Dhofar said that should regulatory assent not be received by March 31, it would instead look to issue convertible bonds worth up to RO100 million ($260 million).

Bank Dhofar is working with National Bank of Abu Dhabi and Standard Chartered about its capital-raising plans, sources told Reuters earlier this month.

The bank had a total capital adequacy ratio (CAR) of 12.93 per cent at the end of September, down from 13.17 per cent at the same point of 2013, according to its third-quarter financial statement.

In comparison, Bank Muscat, Oman's largest bank, had a CAR of 15.6 per cent, while National Bank of Oman, the country's third-largest bank by assets, had a CAR of 13.8 per cent at the end of September.

Bank Dhofar also said shareholders approved setting up a euro medium term note (EMTN) programme worth $500 million in the next 12 months, which would allow the bank to issue non-convertible bonds with a likely tenor of five years, subject to regulatory approval. –Reuters