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).
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