Sunday, July 14, 2013

Global IME acquires Social Development Bank, Gulmi Development Bank

Financial institutions should merge after testing their compatibility and transactions of each other‚ suggested central bank governor Dr Yubaraj Khatiwada, addressing an inaugural of a new merged financial entity between Global IME Bank and two development banks.
They should check each other’s strengths and weaknesses‚ and be well informed of their  lending portfolio and client base before deciding to merge‚” he said.
Apart from Due Diligence Audit (DDA), the financial institutions should also conduct staff audit, the governor suggested.
As the central bank has not yet brought acquisition regulation, the two development banks – Social Development Bank and Gulmi Bikas Bank – have been merged with the Global IME Bank — that was formed last year after a merger between a commercial bank Global Bank and two finance companies, IME Financial Institution and Lord Buddha Finance, though it is rather acquisition of the two development banks by Global IME Bank.
Global IME Bank’s merger with the two development banks was finalised in May but it could finalise last week after the central bank and  Office of Company Registrar’s green signal.
The Due Diligence Audit had fixed Gulmi Bikas Bank and Social Development Bank’s share swap ratio at Rs 50 and Rs 40 for each Global IME share at Rs 100.
The bank’s capital fund will stand at Rs 3.45 billion with 64 branch networks
across the country after the merger. The deposit base will be Rs 32 billion and lending has gone up to Rs 26 billion, after the merger.
“Though Global Bank was established as the 19th commercial bank of the country, it has become one of the top 10 large banks in terms of capital and have
the widest branch network among private banks after the merger‚” said chairman of the bank Chandra Dhakal.

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