Century Bank acquires Sagarmatha Finance

Century Commercial Bank has acquired Sagarmatha Finance.
Finance Minister Gyanendra Bahadur Karki inaugurated the joint operation of the bank today. After the acquisition, the bank has Rs 5.46 billion issued capital with some 66 branch networks. The bank is also preparing to acquire Alpine Development Bank and Seti Finance in the near future to increase the paid up capital. The central bank has made it mandatory for commercial banks to have Rs 8 billion paid up capital by the end of the current fiscal year.

Century Commercial Bank gets Sebon green signal to go public

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 32^nd listed commercial bank at the Nepal Stock Exchange (Nepse).

Century Commercial Bank becomes 31st commercial bank in the country

The central bank has awarded Century Commercial Bank with the operating licence today making it the 31st commercial bank in the country.
"The bank has Rs 5 billion authorised capital and Rs 2 billion paid up capital," said Pradeep Man Baidhya, chairman of the bank that has 538 promoters.
"The promoters has 54 per cent shares and is planning to float 46 per cent shares to the public," he said, adding that it had, earlier, planned to float 30 per cent shares to the public according to the central bank's directives.
After some problem with the promoters, the youngest commercial bank has changed its capital structure.
Headquatered in Kathmandu, the bank has Ganesh Kumar Shrestha as its chief executive officer.
Though, the central bank has temporarily halted the licencing for the commercial banks claiming that it needs revision on the banks licencing policy, there are couple of development banks that have applied for the up gradation to the Class-A commercial banks.
But the central bank is, unlike earlier, not speeding up their upgradation as it has changed the policy of awarding licence on the basis of paid up capital only.
According to the central bank, it is revisiting its policies according to the recent development in the financial sector. "Nepal Rastra Bank (NRB) is not putting the curb on opening new banks but trying to revisit the current licencing policy to make the banking industry more competent,” according to central bank.
The Monetary Policy for the fiscal year 2010-11 has also spelled out the Merger and Acquition (M&A) proposition for the banks and financial institutions (BFIs) saying that the economy needs strong but few BFIs not more and weak ones.
There are 245 banks and financial institutions in the country licenced by the central bank including Class-A (31 commercial banks), Class-B (80 Development Banks), Class-C (79 Finance Companies) and Class D (25 microfinance institutions) and some NGOs with limited banking facilities.

Commerz and Trust Bank Nepal gets operating licence

The central bank has awarded Commerz and Trust Bank Nepal operating licence today to work as a class-A commercial bank.
The bank that has Rs 3 billion authorised capital and Rs 2 billion paid up capital will be the 29th commercial bank in the country. "It has 360 promoters," said the youngest commercial bank.
"The bank will float Rs 600 million of ordinary shares to the public," it said. According to the central bank directive, a commercial bank has to float shares equivalent to 30 per cent of the paid up capital to the public.
The bank is soon going to start its transactions from its head office at Kamaladi, Kathmandu, it added.
Currently, there are 28 commercial banks in operations, though the central bank has halted 'temporarily' to provide licence for the new commercial banks on the basis of paid up capital only. But still some other commercial banks like Century Commercial Bank are also in pipeline.
Apart from these 29 commercial banks, the country has 79 development banks, 79 finance companies, 16 NRB-licensed Cooperatives that are undertaking limited banking transactions, 45 NRB-licensed NGOs that are undertaking micro finance transactions and 25 insurance companies, according to the central bank data.
"Besides the establishment of new banks and financial institutions, the branch expansion of commercial banks also took place significantly in the last fiscal year," the central bank's annual report for the fiscal year 2009-10 said, adding that commercial bank branches increased by 214 to 966 in mid-July 2010 from 752 in mid-July 2009. "Similarly, branches of development banks and finance companies stood at 358 and 265 respectively."