Oman’s Bank Sohar reached an agreement with Bank Dhofar on the terms of a proposed merger that would create a bank with combined assets of almost $16 billion, a Bloomberg report said.

Each Bank Dhofar share will be exchanged for 1.29 shares of Bank Sohar if the merger goes ahead, Bank Sohar said in a statement today. Bank Sohar gained 3.4 percent to 0.18 riyals at 2:07 p.m. in Muscat, while Bank Dhofar rose 0.4 percent to 0.25 riyals.

The two banks have been exploring a possible merger since July 2013. A combination of the lenders would create Oman’s second-largest bank, behind Bank Muscat which has assets of $32 billion.

Bank Sohar’s acting chief executive officer, Rashad Ali Al-Musafir resigned earlier this month citing personal reasons, according to a statement published on the stock exchange website.

Activity in Oman has been picking up amid the slump in oil prices. The government is issuing a dollar bond and state-owned Petroleum Development Oman is raising a $3.4 billion loan backed by oil sales.

The government is also looking to sell a privately-placed sukuk, two people with knowledge of the matter said last month.-Bloomberg