Kathmandu, January 10
Following the signal from Nepal Rastra Bank to soar up the capital, a number of bank and financial institutions (BFIs) have reinvigorated the merger process. Most of the BFIs, through the Annual General Meetings, have already given full mandate to their Board of Directors to pursue possible merger.
Some of the BFIs have even urged the central bank to explore and facilitate the
possible merger for them.
The BFIs have, in fact, started the merger process from the last fiscal year, after the regulator came up with a merger policy.
This year, too, the BFIs are in the mood to merge to soar up their paid-up instead of looking for other sources of capital.
Century Commercial Bank, Janta Bank Nepal, Citizens Bank International, and Nepal Credit and Commerce (NCC) are among the commercial banks that have already initiated the merger process, internally.
Besides them, Lumbini Bank has already signed a merger deal Manjushree Finance and Global IME Bank has inked a pact with Commerz and Trust Bank Nepal Limited.
Likewise, Civil Bank has also formally entered into a merger process with Axis Development Bank and Civil Merchant.
Prabhu Bikas Bank is now trying to take over the management of Kist Bank after buying the stock of Kist’s shares from the secondary market, as part of its strategy to merge the two banks.
According to the central bank sources, Janta Bank is planning a merger with Tourism Development Bank, and they are currently working on the swap ratio.
NCC Bank is also seeking merger with Apex Development Bank, which was formed following the merger of Royal Merchant, Rara and AP Finance.
“Though the process has been slightly impeded following a row pertaining to NCC BoD, the merger process is likely to speed up once the commercial bank sorts out the problem,” the source added.
Citizens and Century Commercial Bank have been preferring classes ‘B’ and ‘C’ BFIs for merger over other commercial banks.
Citizen has requested the central bank to duly notify them if it comes across any suitable development bank or finance company for possible merger. Regional development banks and finance companies have also been urging the central bank to look for appropriate companies for merger.
Mega, Siddhartha and Kumari banks, too, are in a mood to go for a merger while Prime Commercial and Machhapuchchhre Bank have been looking for a joint venture with foreign banks.
It may also be noted that around four dozen BFIs have already merged after the central bank introduced the merger policy.
Nonetheless, some BFIs are also waiting for acquisition policy from the central bank, citing that the employees stand to benefit more than the shareholders in a merger process.
The BFIs are favoring the acquisition process also because a bulk of the employees could be laid off in the process unlike the general merger procedure.
Following the signal from Nepal Rastra Bank to soar up the capital, a number of bank and financial institutions (BFIs) have reinvigorated the merger process. Most of the BFIs, through the Annual General Meetings, have already given full mandate to their Board of Directors to pursue possible merger.
Some of the BFIs have even urged the central bank to explore and facilitate the
possible merger for them.
The BFIs have, in fact, started the merger process from the last fiscal year, after the regulator came up with a merger policy.
This year, too, the BFIs are in the mood to merge to soar up their paid-up instead of looking for other sources of capital.
Century Commercial Bank, Janta Bank Nepal, Citizens Bank International, and Nepal Credit and Commerce (NCC) are among the commercial banks that have already initiated the merger process, internally.
Besides them, Lumbini Bank has already signed a merger deal Manjushree Finance and Global IME Bank has inked a pact with Commerz and Trust Bank Nepal Limited.
Likewise, Civil Bank has also formally entered into a merger process with Axis Development Bank and Civil Merchant.
Prabhu Bikas Bank is now trying to take over the management of Kist Bank after buying the stock of Kist’s shares from the secondary market, as part of its strategy to merge the two banks.
According to the central bank sources, Janta Bank is planning a merger with Tourism Development Bank, and they are currently working on the swap ratio.
NCC Bank is also seeking merger with Apex Development Bank, which was formed following the merger of Royal Merchant, Rara and AP Finance.
“Though the process has been slightly impeded following a row pertaining to NCC BoD, the merger process is likely to speed up once the commercial bank sorts out the problem,” the source added.
Citizens and Century Commercial Bank have been preferring classes ‘B’ and ‘C’ BFIs for merger over other commercial banks.
Citizen has requested the central bank to duly notify them if it comes across any suitable development bank or finance company for possible merger. Regional development banks and finance companies have also been urging the central bank to look for appropriate companies for merger.
Mega, Siddhartha and Kumari banks, too, are in a mood to go for a merger while Prime Commercial and Machhapuchchhre Bank have been looking for a joint venture with foreign banks.
It may also be noted that around four dozen BFIs have already merged after the central bank introduced the merger policy.
Nonetheless, some BFIs are also waiting for acquisition policy from the central bank, citing that the employees stand to benefit more than the shareholders in a merger process.
The BFIs are favoring the acquisition process also because a bulk of the employees could be laid off in the process unlike the general merger procedure.
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