NIC Bank and Bank of Asia Nepal have signed a merger agreement.
The merger agreement was signed by the chairmen of both the banks today evening in the presence of directors, joint merger committee members, promoters, and officials of both the banks.
However, the merger is subject to approval of the annual general meeting of both the banks and regulatory authorities.
It will be the first merger between two healthy class 'A' financial institutions that will lay the foundation for a strong commercial bank, the chairmen said, adding that the signing of the agreement was the culmination of a meticulously planned merger process that started some six months ago. "The merger will create one of the largest banks in the country in terms of capital fund, balance sheet size, branch, ATM network, customers and employees," they claimed.
NIC Bank posted an operating profit of Rs 666.79 million, whereas Bank of Asia Nepal posted a profit of Rs 327.11 million in the last fiscal year. Share trading of both the banks has been halted for the last six months due to the merger process.Both the banks have lauded their stakeholders including shareholders, promoters, regulators and staff for their excellent support and cooperation for the much anticipated merger that will not only increase the balance sheet strength but also the professionalism of the merged institution as by the time the merger is completed, the core capital, including reserves, of the new entity will be around Rs 5 billion.
The central bank has asked the banks and financial institutions with the same promoters to go for merger. NIC Bank and Bank of Asia Nepal are largely promoted by the same groups. Bishal Group and Shanghai Group hold majority stakes in both of them, whereas NIC Bank has Golchha and Golyan Groups also as promoters and Bank of Asia Nepal has promoters from Lucky Group.