12 March 2021, Kathmandu
Himalayan and Investment Bank have reached an agreement for the merger.
Initially, the Asset and Liability Assessment (DDA) has been completed. Both sides are positive towards the initial DDA report.
Chairman of the Investment Bank Prithvi Bahadur Pandey said that both parties were very positive about the merger. He said that no matter how much work is being done so far. It is moving in a positive direction. This means we can hear good news in few days.
Once the DDA is completed, there will be a Memorandum of Understanding (MoU) for the merger.
The merger of the two banks also eased their family ties.
Himalayan Shamsher Rana established Himalayan Bank. He is now on the board of directors of the bank. His son Ashok Shamsher is the CEO of Rana Bank.
Meanwhile, Prithvi Bahadur Pandey, Chairman of the Investment Bank, is the son-in-law of Himalaya Shamsher. NRB has been encouraging these banks to merge with each other on the basis of family relations.
Monetary policy has placed pressure on those banks to merge.
The two banks have the same share, the investor will get the same share of the bank after the merger. Documentation for the MoU has now begun.
“Agreements will be made for the merger of banks and financial institutions promoted by the same person/group and directly/indirectly owned/controlled by a single-family and business group and existing business relationships,” said the monetary policy.
Both family companies own shares in the bank.
About Himalaya Bank:
Himalayan Bank Limited is one of the largest private banks in Nepal. In 1992, the Bank was incorporated by a number of prominent Nepalese individuals in collaboration with the Employees Provident Fund and Habib Bank Limited of Pakistan. The bank began operations in January 1993. Despite the tough competition in the Nepalese Banking sector, Himalayan Bank has been able to maintain a lead in the primary banking activities- Loans and Deposits.
Himalayan Investment Bank will be the largest after Rs. 25 billion. Adjusting for both banks’ second-quarter financial statements, the paid-up capital would be about Rs 25 billion, which is higher than the existing commercial banks.
About Nepal Investment Bank:
Nepal Investment Bank Ltd. (NIBL), formerly Nepal Indosuez Bank Ltd., was founded in 1986 as a joint venture between French and Nepalese partners. Credit Agricole Indosuez, a subsidiary of one of the largest banking groups in the world, was the French partner (holding 50% of NIBL’s capital).
Later in 2002, a group of Nepalese companies consisting of bankers, professionals, industrialists, and businessmen acquired 50% of the holdings of Credit Agricole Indosuez in Nepal Indosuez Bank Ltd., and the name of the bank also changed to Nepal Investment Bank Ltd.
Currently, the bank’s shareholding pattern is as follows: promoters-69% and general public-31%.