3rd November 2025, Kathmandu
The financial sector of Nepal witnessed a major structural change in its commercial banking landscape as National Life Insurance Company Limited successfully acquired the entire promoter stake held by Habib Bank Limited (HBL) of Pakistan in Himalayan Bank Limited (HBL).
National Life Purchases Shares
This highly anticipated transaction, which involved the sale of over 28 million shares, marks the complete exit of Habib Bank’s 12.93% ownership from Himalayan Bank and solidifies National Life Insurance’s position as a significantly major promoter shareholder.
The successful transfer underscores the growing role of domestic institutional investors, particularly insurance companies with large investable funds, in consolidating strategic ownership within Nepal’s Class ‘A’ commercial banks.
Transaction Details: Premium Price and Massive Volume
The share transaction was executed over two trading days, demonstrating the high volume involved and the strategic nature of the deal.
Total Transaction Value and Price
The entire stake, comprising a total of 28,012,447 shares, was fully transferred to National Life Insurance in the open market following the necessary regulatory approvals.
- Total Shares Transacted: The purchase involved the full 28,012,447 shares held by Habib Bank. The report highlights the trade of 14,006,217 shares on Sunday, valued at approximately NPR 1.665 billion. This followed a similar transaction on Thursday of 14,006,230 shares, also valued at approximately NPR 1.665 billion.
- Final Share Price: The final trading price for each share was set at NPR 118.88.
- Total Deal Valuation: The total value of the acquisition by National Life Insurance amounted to approximately NPR 3.33 billion (NPR 1.665 billion + NPR 1.665 billion).
Competitive Bidding and Premium Offer
The final price of NPR 118.88 per share was a result of a competitive offer made by National Life Insurance. The initial offer price set by Habib Bank for its shares was NPR 112.80 per share. National Life Insurance strategically placed a higher bid, offering NPR 118.88 per share, demonstrating its strong conviction in the long-term value of Himalayan Bank and its readiness to pay a premium to secure the large, strategic promoter stake. This higher bid proved successful in securing the stake and concluding Habib Bank’s multi-year effort to divest from the Nepali bank.
Regulatory Compliance and Strategic Context
The finalization of this significant transaction was contingent upon meeting strict regulatory requirements, particularly those set by the banking sector’s supreme regulator.
Nepal Rastra Bank Approval
The Share Purchase Agreement (SPA) between Habib Bank and National Life Insurance was signed during the first week of Bhadra (mid-August). The transaction, involving a transfer of over 12% of the bank’s ownership, required mandatory clearance from the Nepal Rastra Bank (NRB). The NRB’s final approval was granted after due diligence, ensuring compliance with the Bank and Financial Institutions Act (BAFIA) and other integrated directives, which govern the sale of promoter shares and institutional investment exceeding a 2% stake in a bank. NRB’s go-ahead was the final step that allowed the market transaction to proceed.
Habib Bank’s Complete Exit
Habib Bank Limited, a Pakistani banking major, had been one of the founding international joint-venture partners of Himalayan Bank when it was established in 1993. The transaction marks Habib Bank’s complete and formal exit from its 12.93% ownership stake in the Nepali commercial bank. This divestment concludes a long-standing strategic objective for Habib Bank, whose stake had been reduced from an earlier 20% following Himalayan Bank’s merger with Civil Bank Limited.
Strengthening National Life Insurance’s Position
For National Life Insurance, the acquisition is a monumental step. Prior to this purchase, National Life Insurance already held a small stake in Himalayan Bank, currently at 1.25%. With the acquisition of Habib Bank’s entire 12.93% share, National Life Insurance’s total ownership stake is set to increase to approximately 14%. This significantly elevates the insurance company’s influence and position within Himalayan Bank’s promoter group, likely granting it stronger representation on the bank’s Board of Directors. This major investment is indicative of the robust liquidity within the insurance sector and its strategy to secure high-quality assets in the commercial banking sector to optimize returns on its substantial investable funds.
For More: National Life Purchases Shares