DUBAI, Aug 11: Bank Muscat, Oman's biggest lender by market value, has agreed to sell a 15 per cent stake to Dubai Financial for $619 million, making the Dubai government-owned firm the bank's second-biggest shareholder.

Bank Muscat will issue 161.57 million new shares at 1.475 rials ($3.83) per share through a private share sale with Dubai Financial, the bank said in a statement on Saturday.

The transaction, which awaits regulatory and shareholder approvals, would help the lender expand, Bank Muscat Chairman AbdulMalik al-Khalili said in a statement.

We intend to use these funds to support the overall asset growth and expansion plans of the bank both in the domestic market and overseas, Khalili said.

Across the Gulf, banks, buoyed by the economic windfall of a tripling in oil prices since 2002, are expanding and making acquisitions as competition intensifies in their home markets.

Dubai Financial, whose parent Dubai Holding is owned by Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum, said in July it had agreed to buy around 37 per cent of Bahrain's TAIB Bank and was looking to raise its stake to 60 per cent.— Reuters