Two commercial banks – Global IME Bank and Janata Bank Nepal – today decided to merge supporting the central bank’s move for a ‘big’ merger, and also to become the largest bank in the country in terms of capital size.
Global IME Bank and Janata Bank Nepal signed a memorandum of understanding (MoU) today, informed chairman of Global IME Bank Chandra Prasad Dhakal, after the signing ceremony. “We have decided to enter into a merger looking into central bank’s plan,” he said, adding that the new bank will retain the name ‘Global IME’.
The MoU was signed by Dhakal and chairman of the Janata Bank Keshav Rayamajhi, on behalf of their respective banks. They have agreed to name chief executive of Janata Bank Parshuram Kunwar Chhetry as the chief executive of merged entity and Global IME’s acting chief executive Mahesh Dhakal will be his deputy. “The share swap ratio has been set at 1:0.85,” Dhakal added. It means that investors holding 100 unit shares of Janata Bank Nepal will receive 85 unit shares of Global IME post merger. “However, the final swap ratio will be determined after the due diligence audit (DDA) report is finalized,” he said, adding that the management teams of both the banks will finalise all the necessary procedures within four months. ““We will now seek the letter of intent from the Nepal Rastra Bank for the merger, while a committee will work on the DDA simultaneously.”
According to the third quarter report of the current fiscal year 2018-19, the paid-up capital of Global IME and Janata Bank Nepal stands at Rs 10.31 billion and Rs 8.08 billion, respectively. Likewise, the reserves and surplus of Global IME Bank and Janata Bank Nepal stand at Rs 5.12 billion and Rs 1.75 billion, respectively. The joint entity – post merger – will have Rs 18.39 billion paid-up capital. “Likewise, Global IME’s net profit stands at Rs 1.87 billion and Janata Bank’s net profit stands at Rs 1.02 billion.”
According to the MoU, the board of the joint entity will comprise of five directors from Global IME Bank and two from Janata Bank Nepal.
This will be the second merger for the Global IME Bank at the commercial bank level. Global IME Bank has already completed merger with the then Commerz and Trust Bank, apart from two development banks and two finance companies, and has acquired two development banks.
After the merger, the merged entity could post around Rs 5 billion net profit in the next fiscal year. However, the EPS wil stand at Rs 25.43, and the shareholders of both the banks shareholders will benefit from the proposed merger.
Global IME Bank and Janata Bank Nepal signed a memorandum of understanding (MoU) today, informed chairman of Global IME Bank Chandra Prasad Dhakal, after the signing ceremony. “We have decided to enter into a merger looking into central bank’s plan,” he said, adding that the new bank will retain the name ‘Global IME’.
The MoU was signed by Dhakal and chairman of the Janata Bank Keshav Rayamajhi, on behalf of their respective banks. They have agreed to name chief executive of Janata Bank Parshuram Kunwar Chhetry as the chief executive of merged entity and Global IME’s acting chief executive Mahesh Dhakal will be his deputy. “The share swap ratio has been set at 1:0.85,” Dhakal added. It means that investors holding 100 unit shares of Janata Bank Nepal will receive 85 unit shares of Global IME post merger. “However, the final swap ratio will be determined after the due diligence audit (DDA) report is finalized,” he said, adding that the management teams of both the banks will finalise all the necessary procedures within four months. ““We will now seek the letter of intent from the Nepal Rastra Bank for the merger, while a committee will work on the DDA simultaneously.”
According to the third quarter report of the current fiscal year 2018-19, the paid-up capital of Global IME and Janata Bank Nepal stands at Rs 10.31 billion and Rs 8.08 billion, respectively. Likewise, the reserves and surplus of Global IME Bank and Janata Bank Nepal stand at Rs 5.12 billion and Rs 1.75 billion, respectively. The joint entity – post merger – will have Rs 18.39 billion paid-up capital. “Likewise, Global IME’s net profit stands at Rs 1.87 billion and Janata Bank’s net profit stands at Rs 1.02 billion.”
According to the MoU, the board of the joint entity will comprise of five directors from Global IME Bank and two from Janata Bank Nepal.
This will be the second merger for the Global IME Bank at the commercial bank level. Global IME Bank has already completed merger with the then Commerz and Trust Bank, apart from two development banks and two finance companies, and has acquired two development banks.
After the merger, the merged entity could post around Rs 5 billion net profit in the next fiscal year. However, the EPS wil stand at Rs 25.43, and the shareholders of both the banks shareholders will benefit from the proposed merger.
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