Securities Board of Nepal (Sebon) has granted permission to Century Commercial Bank for the Initial Public Offering (IPO).
The commercial bank will float Rs 920 million worth – the largest IPO among the commercial banks – primary shares to the public.
After the IPO – that is expected by the first week of January – the bank will have Rs 2 billion paid up capital as currently it has Rs 1.08 billion paid up capital.
ICRA Nepal had already assigned Century Commercial Bank’s proposed IPO a rating of below-average – as according to the rule, the bank cannot float share without being rated by ICRA Nepal – due to the bank’s limited track record, lack of diversity in earnings, low seasoning of credit book and inferior deposit profile compared to industry systemic average, low profitability, competition from other commercial banks and uncertain operating environment.
However, Century Commercial Bank has lower exposure to real estate lending compared to industry average with comfortable assets quality indicators, the ICRA said.
According to the central bank's current policy, Century Commercial Bank could be the last commercial bank to float primary share.
The bank has posted Rs 35 million operating profit in the first three months of the current fiscal year.It will be the 32nd listed commercial bank at the Nepal Stock Exchange (Nepse).