Habib Bank Sells Its Stake in Himalayan Bank to National Life Insurance

24th August 2025, Kathmandu

In a significant move for Nepal’s financial sector, Habib Bank of Pakistan has completed the sale of its ownership stake in Himalayan Bank Limited (HBL) to National Life Insurance Company Limited.

Habib Bank Sells Stake

This landmark agreement, officially signed last Friday, represents a major transfer of ownership from a foreign to a domestic institution, signifying a pivotal moment in the evolution of Nepal’s banking and insurance industries.

The Regulatory Path to Acquisition

The transaction was executed only after National Life Insurance secured the necessary regulatory approvals. Before entering the bidding process, the company first obtained clearance from the Insurance Board of Nepal, which governs the investment activities of insurance providers. With this crucial regulatory go-ahead, National Life was able to participate in the share purchase and successfully acquired the stake that Habib Bank was offering.

Following the agreement, the process now moves to its final and most critical stage: obtaining approval from the Nepal Rastra Bank (NRB), the central bank. As per the country’s regulatory framework, all ownership transfers and foreign investment exits in the banking sector must receive NRB’s consent. Habib Bank’s representatives have formally requested that Himalayan Bank forward the matter to the central bank for final clearance. This step ensures that the transaction complies with national laws and is in line with the central bank’s financial stability objectives.

Key Details of the Share Transaction

Habib Bank had put its entire 12.93% stake in Himalayan Bank up for sale, which amounts to approximately 28,012,448 shares. The initial asking price proposed by Habib Bank was NPR 112.80 per share. However, National Life Insurance made a higher, more competitive bid, offering to purchase the shares at a premium of NPR 118.80 per share. This offer was accepted, a clear demonstration of National Life Insurance’s strong financial capacity and its long-term confidence in the stability and profitability of Himalayan Bank. The final purchase price, which exceeded the original proposal, underscores the value that domestic institutions place on strategic investments in the country’s leading commercial banks.

Broader Significance of the Transaction

This share transfer carries several key implications for Nepal’s financial landscape:

• Exit of a Foreign Investor: The sale marks the formal divestment of Habib Bank, a long-term foreign stakeholder, from the Nepali banking market. This event is a signal of the shifting dynamics within Nepal’s financial sector.
• Strengthening of Domestic Ownership: The acquisition by National Life Insurance means that the ownership structure of Himalayan Bank will now be more firmly rooted in domestic institutions.
• Strategic Diversification for National Life Insurance: The deal provides National Life with an unprecedented opportunity to expand its footprint beyond the insurance sector and into banking. This can lead to the creation of potential synergies between banking and insurance services, benefiting both institutions and their customers.
• Boost to Investor Confidence: The premium purchase price paid by National Life reflects robust investor confidence in Himalayan Bank’s long-term growth prospects, sending a positive signal to the broader market.

Market analysts have reacted positively to the development, suggesting that the transaction is likely to enhance Himalayan Bank’s stability, as National Life is one of Nepal’s most established and capital-rich insurance companies. The deal is also viewed as a reflection of Nepal’s evolving financial landscape, where domestic institutions are increasingly capable of leading major investment deals that were once dominated by foreign investors.

The Future of Collaboration

Once the Nepal Rastra Bank provides its final approval, National Life Insurance will officially become a significant shareholder in Himalayan Bank. This is expected to pave the way for closer collaboration between the two financial giants, potentially leading to new, innovative products and joint ventures that benefit customers. For Himalayan Bank, the entry of a strong domestic shareholder like National Life could mean additional stability, access to new client networks, and enhanced opportunities for future growth. The transaction signifies a maturing financial market where strategic partnerships between banks and insurance companies can create new avenues for sustainable growth and innovation.

Conclusion

The agreement for the sale of Himalayan Bank shares between Habib Bank of Pakistan and National Life Insurance marks a pivotal and strategic moment in Nepal’s financial sector. With a 12.93% stake, a total of over 28 million shares—now changing hands, the transaction signals both the exit of a foreign investor and the strengthening role of a strong domestic player. As the deal awaits the final stamp of approval from the central bank, stakeholders across Nepal’s financial markets are watching closely. The acquisition is poised to not only fortify Himalayan Bank’s ownership structure but also create new possibilities for collaboration and growth between the banking and insurance sectors in Nepal.

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