Two commercial banks of Nepal, Global IME Bank Limited and Commerz and Trust Bank Limited have signed a final agreement on their merger process. Chairpersons Chandra Prakash Dhakal of Global IME and Shobhakar Neupane of Commerz and Trust signed the agreement on Tuesday. Both chairpersons have signed Memorandum of Understanding (MOU) on merger in last November. Previously NIC Bank Limited and Bank of Asia merged to become NIC Asia from 30th June 2013. After this merger, there will be 30 commercial banks in Nepal. The bank, which was named as Global Bank at the time of its establishment has so far merged with five other institutions. Bank had merged IME Financial Institution, Lord Buddha Finance, Social Development Bank and Gulmi Bikash Bank in past two years. But this is the first time bank is trying to merge with a commercial bank.
The merged bank will be named Global IME Bank Ltd and Global IME Bank CEO Ratna Raj Bajracharya retaining the same position. Bank’s total paid up capital will be Rs 4.41 billion, deposit base of Rs 48 billion, credit base of Rs 39 billion and customer base of 451 thousand. The bank will have 87 branches, 7 extension counters, 17 branchless banking services and 80 ATM outlets. The bank will have a total of 1,050 employees.
After this merger, the bank entity would be the biggest bank in terms of equity base among private promoted bank and would remain in the third position amongst “A” Class Commercial Banks after two government based banks, Agriculture Development Bank and Rastriya Banijya Bank. The bank would be one of the largest banks in terms of total branch penetration after Agriculture Development Bank, Rastriya Banijya Bank and Nepal Bank Ltd.
“We decided to go for merger as it will increase our capital base as well as enhance our capacity to invest in large-scale projects,” Global IME chairperson Dhakal said, adding, “The merger will become a merger in real sense because we are merging with a new partners which will bring synergy in the banking system.” Both banks entered into the merger process due to tough competition in the financial market.
Banks and financial institutions (BFIs) are on a merger spree after the central bank of Nepal, Nepal Rastra Bank (NRB), issued Merger Bylaws in May 2011. Since then, a total of 43 BFIs have undergone mergers to form 18 institutions.
Name of the merged financial institutions
a) Himchuli Bikas Bank Ltd and Birgunj Finace Ltd to become H & B Development Bank Ltdb) Business Development Bank Ltd and Universal Finance Ltd to become Business Universal Development Bank Ltd
c) NIC Bank and Bank of Asia to become NIC Asia Bank Ltd
d) Prabhu Finance, Baibhav Finace and Sambridhi Bikas Bank to become Prabhu Bikas Bank Ltd
e) Machhapuchhre Bank and Standard Finance to become Machhapuchhre Bank Ltd.
f) Api Finance Ltd, Royal Merchant Banking & Finance Ltd and Rara Bikash Bank Ltd to become Apex Development Bank Ltd.
Merger in financial institutions are positive signs in Nepali economy, merger will increase the capital which will help them to invest in big projects. We have also heard that Bhaktapur based Navadurga Finance Company to merge with Lumbini Bank Limited very soon.
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