Nabil Bank to acquire Nepal Bangladesh Bank

 Nabil Bank has signed an agreement today to acquire Nepal Bangladesh Bank (NB Bank).

The merger committee’s coordinator from Nabil Bank Udaya Krishna Upadhyay and the coordinator from NB Bank Indra Bahadur Thapa signed the preliminary memorandum of understanding (MoU) for acquisition in a share swap ratio of 100:43.

After the acquisition, NB Bank’s business transactions will be in the name of Nabil Bank, but the chief executive officer and chair of the merged entity's board has not been decided yet.

According to a press note issued by the Nabil Bank, the merged entity will have a core capital of Rs 43 billion, paid-up capital of Rs 22.5 billion, loans of Rs 300 billion, deposits of Rs 314 billion with 235 branches and over 1.6 million customers.

The agreement came a day after the Kathmandu District Court issued a stay order barring NB Bank from selling the promoter shares of its foreign partner IFIC Bank Ltd Bangladesh to Chaudhary Group of Nepal. A single bench of Justice Ram Chandra Poudel of the Kathmandu District Court had issued the order against the NB Bank’s plan to sell the share to Nabil Bank, whose majority shares are owned by Chaudhary Group (CG).

Earlier, the Chairman of Sunrise Bank Motilal Dugad had filed a writ at the Kathmandu District Court, and also Patan High Court, stating that the IFIC Bank had breached the agreement made with him promising to sell the promoter shares.

Last July, NB Bank announced an exit of IFIC Bank that owned 40.09 per cent shares of the bank. Binod Chaudhary led Chaudhary Group then made its way to purchase 36,827,426 unit shares of the foreign partner of the NBB. But the Dugad claimed that he has already strike the deal.

Nabil Bank partners with ICICI Bank

Nabil Bank and India’s leading private sector bank ICICI Bank today signed a Memorandum of Understanding (MoU) that sets out a framework for co-operation and strengthen the existing relationship between the two institutions across various businesses like trade, remittances and treasury.
Nabil chief executive Anil Keshary Shah and head of International Financial Institution Group under ICICI Bank Ranju Sigtia signed the MoU at Nabil Bank’s head-quarters in Kathmandu.
The banks will work in close co-ordination with each other to support the trade and treasury needs of their customers seamlessly. The initiative will enable both the banks to effectively leverage the combined strengths of Nabil Bank’s deep market access in Nepal and ICICI Bank’s expertise in banking and the distribution franchise across India and in key global markets, reads a press note issued by the Nabil Bank.
“We are proud to partner with ICICI Bank,” said Shah after signing ceremony. “This MoU creates a platform for sharing knowledge and deepening network connectivity between Nabil Bank and ICICI Bank - especially for our customers doing business with India,” he added.
Speaking on the occasion, Sigtia said that Nepal has a strong and growing, trade and investment corridor with India. “The ICICI Bank has been actively working with partner banks to connect customers in Nepal with India and other overseas locations, where ICICI Bank has its presence,” she said, adding that in line with the bank’s continuing commitment to furthering participation in the growing India-Nepal economic corridor, the bank is delighted to sign this MoU with Nabil Bank.

Commercial banks record low profit growth

The profit growth rate of the commercial banks has dropped in the first quarter of the current fiscal year compared to the same period of the last fiscal year, though they have posted profit as usual.
The commercial banks recorded a total of Rs 16.17 billion profit – in the first quarter of the current fiscal year – an increase by 6.25 per cent compared to the same period in the last fiscal year, according to the unaudited financial statements of the commercial banks.
During the first quarter of the last fiscal year, the 28 commercial banks collectively had recorded Rs 15.4 billion profits, revealed the statement that shows Rastriya Banijya Bank (RBB) as the top profit earner – with Rs 1.127 billion profit – in the first quarter of the current fiscal year. In the first three months of fiscal year 2018-19, the wholly-state owned bank had recorded Rs 1.119 billion profit.
Nabil Bank followed Rastriya Banijya Bank in the race to earn highest profit with Rs 1.123 billion in the first quarter of the current fiscal year. Nabil had posted Rs 1.05 billion profit in the last fiscal year’s first quarter. The third bank to be in the billionair club is NIC Asia Bank that has earned Rs 1.009 billion in the first three months of the current fiscal year 2019-20.
Likewise, Nepal SBI Bank, Citizens Bank, Siddhartha Bank, Bank of Kathmandu, NCC Bank, Nepal Investment Bank, Civil Bank and Nepal Bank profit growth rate has dropped compared to the first quarter of the last fiscal year.
Among the eight commercial banks Nepal Investment Bank had earned Rs 1.05 billion in the first quarter of last fiscal year but posted only Rs 844 million profit in the same period this fiscal year. Likewise, Nepal Bank’s profit has also dropped to Rs 581.8 million in first quarter of the current fiscal year compared to Rs 913.88 million profit in same period last fiscal year. The profit of Nepal SBI Bank has also come down to Rs 437.23 million in the first quarter of 2019-20 from Rs 489.77 million during the same period last fiscal year, whereas Bank of Kathmandu’s (BoK) earning has also been limited to Rs 383.7 million from Rs 386.82 million in the first quarter of last fiscal year.
Among, the 28 commercial banks, Civil Bank ranks the lowest in the profit earning. According to the bank’s unaudited financial statement, the bank has posted Rs 158.9 million profit in the first quarter of this fiscal year against Rs 185 million profit in the last fiscal year’s first quarter.

ADB creates emergency trade finance facility for Nepal by expanding its Trade Finance Programme

Asian Development Bank (ADB) is expanding its Trade Finance Programme (TFP) in Nepal by an additional $40 million to help banks finance import of much needed goods to support reconstruction and immediate needs in response to the recent earthquake.        
"The emergency facility for Nepal will help remove financial constraints when companies approach their banks to import what they need for emergency assistance, rehabilitation and reconstruction," ADB’s head of Trade Finance Steven Beck said, adding that the impact of the facility can reach $80 million within a year, since trade finance is typically short term and can roll over in less than 180 days.
ADB’s Trade Finance Programme provides guarantees and loans through banks to support trade. The emergency Trade Finance Programme facility for Nepal will be implemented through four Nepali banks – Himalayan Bank, Nabil Bank, Nepal Investment Bank, and NIC Asia Bank – already participants in ADB’s Trade Finance Programme. The facility will prioritise imports of basic commodities – including food and medicine – and needs related to reconstruction, the ADB press note said.
Thousands have died following the earthquake and hundreds of thousands are unable to return home because buildings have collapsed and transport systems, including roads, are unusable. Over two-thirds of Nepal’s 75 districts are thought to have been affected by the earthquake. It will impose a huge economic toll on the country. Preliminary ADB estimates suggest that the economic growth in Nepal may decline to 4.2 per cent for the current fiscal year of 2014-15, compared to the March projection of 4.6 per cent.
ADB has established a Nepal Earthquake Response Team, which along with UN agencies and other development partners will assess the damage and long-term investment needs for reconstruction and rehabilitation.
Support for trade finance will add to the $3 million grant from the Asia-Pacific Disaster Response Fund that ADB is providing for relief efforts and the up to $200 million additional resources for projects in the first phase of rehabilitation.
The Trade Finance Programme helps fill market gaps for trade finance in developing Asia by providing guarantees and loans to banks to support trade. Backed by ADB’s AAA credit rating, the programme works with over 200 partner banks to provide companies throughout Asia and beyond with the financial support they need to engage in import and export activities.
Since 2009, the Trade Finance Programme has supported more than 6,000 small and medium-sized enterprises in about 10,000 transactions valued at over $20 billion in a wide range of sectors, from commodities and capital goods to medical supplies and consumer goods in the region’s most challenging markets.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region. In 2014, ADB assistance totaled $22.9 billion, including cofinancing of $9.2 billion.

Banks profit surges on higher interest earnings

Commercial banks posted 18 per cent increment to Rs 9.38 billion profit in the second quarter of the current fiscal year 2013-14 due to higher interest earnings. In the last fiscal year's second quarter they have posted a combined profit of Rs 7.94 billion.

Of the total 30 listed commercial banks, only one posted loss

Despite the low borrowing, the interest earning of the 30 banks – in the half year – swelled up to Rs 21.47 billion from the first quarter's interest earning of Rs 9.79 billion.

The commercial banks have however failed to increase income – compared to the first quarter – from other sources like foreign exchange, service charges and others.

Despite the rising profits, they have also failed to increase returns on equity and assets, apart from yield of investment that has decreased, which is a wake up call for the bankers.

The central bank has been asking the banks to reduce the spread rate – the difference between lending and deposit rates – to five per cent, which will further tighten the profit prospects in the next quarter.

The central bank has also asked the banks not to charge any fees for customer services limiting the scope for the profit expansion of the banks.

The commercial banks have earned Rs 2.03 billion profits – in the second quarter – from foreign exchange, compared to Rs 1.02 billion in the first quarter of the current fiscal year. Likewise, income from various fees stood at Rs 2.81 billion compared to Rs 1.4 billion in the first quarter.

Nabil Bank posted the highest net profit (Rs 1.05 billion) followed by Nepal Investment Bank (Rs 940.39 million), Rastriya Banijya Bank (Rs 717.88 million), Everest Bank (Rs 679.11 million) and Standard Chartered Bank (Rs 633.31 million), whereas Kist Bank posted Rs 198.80 million loss in the second quarter.

Western Union, Nabil Bank, Fonepay jointly offer mobile money transfer service

The cost of remittance inflow is going to come down encouraging the migrant Nepali workers to send their hard earned money back home through banking channels. They neither have to visit the Western Union outlets to remit back home.

Western Union, in collaboration with Nabil Bank and Fonepay, today launched a mobile money transfer service for relatives of migrant workers in Nepal from over 200 countries cutting down the cost of sending remittance.

The receivers will collect remittance directly into mobile wallet through Fonepay – powered by F1 Soft.

“Over 20,000 registered eSewa wallet users can cash their money out from any of the 1,200 direct and subagent locations of Nabil Bank,” according to president of F1 Soft Biswas Dhakal.

Consumers subscribed to eSewa mobile wallet can receive remittance sent in minutes from Western Union around the globe using their mobile phone-cum-wallet.

The customers can use their mobile account balance for fund transfers, utility payments, airtime topups, and purchasing goods and services at eSewa accepted websites.
Nepal has not only some 71.46 per cent mobile penetration rate, but is also one of the largest remittance receiving countries among the Least Developed Countries (LDCs) but high cost of remitting has encouraged the migrant workers send their hard earned money back through various dubious channels, hurting the economy.

The country received $4.9 billion – that is almost equivalent to 23 per cent of the gross domestic product (GDP) – in remittance in 2012.
The new option for remitters jointly offered by the Western Union, Fonepay and Nabil Bank to receive international remittance 24/7 through eSewa mobile wallet is expected to boost the remittance inflow through banking channels.

“Western Union is happy to expand mobile services to Nepal,” said senior vice president, Pacific and Indochina of Western Union, Patricia Riingen, on the launching ceremony, here today.

“We aim to expand its mobile footprint as part of our multi-product, multi-channel strategy across world,” she added.

Wai Wai best domestic brand, Ncell best multinational brand

Wai Wai, a flagship brand of the Chaudhary Group, bagged the best domestic brand award, whereas telecom service provider Ncell bagged the best multinational brand award during the Nimbus FNCCI National Excellence Awards ceremony here today.

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Best brand award – that has been started from this year – was selected on the basis of Facebook like and SMS voting.

The domestic instant noodles brand, Wai Wai – that belongs to the first Nepali billionaire listed in Forbes Binod Chaudhary, who is also the President Emiratus of CNI – was nominated along with Chocofun, Jagadamba Steels, Pashupati Paints and Tokla Tea for the best domestic brand.

Likewise, Coca-Cola, Fair & Lovely, Asian Paints and Standard Chartered Bank were other nominees in the best multinational brand category.

On the occasion, President Dr Ram Baran Yadav and finance minister Shankar Prasad Koirala awarded some 16 business houses and individuals under nine categories, including the first ever best brands – domestic and multinational – awards.

The President also handed over Nimbus FNCCI National Excellence Awards to Unilever Nepal, Quest Pharmaceuticals and Get Paper Industry as the best enterprises. The FMCG major Unilever Nepal bagged the coveted FNCCI National Excellence Award for its outstanding performance among large-scale industries, whereas Get Paper Industries was recognised under small enterprises and Quest Pharmaceuticals under the medium-scale enterprises category, and also for implementing best management practices and achieving outstanding results in customer and employee satisfaction.

Likewise, Ncell, F1 Soft International and Advanced Poly Clinic bagged Service Excellence Award under-large, small and medium-scale service enterprises category, whereas Nabil Bank bagged FNCCI People Excellence Award 2013.

The prestigious NRN Business Person of the Year was awarded to Upendra Mahato, while Min Bahadur Gurung – the owner of largest local chain Bhat-Bhateni Super Store – bagged the Best Business Person of the Year-2013 award.

The President also awarded Soaltee Group President Emeritus Prabhakar SJB Rana with Lifetime Achievement Award-2013 for his contribution to the business and the economy of the country.
Likewise, the international fame Prabal Gurung recived the Young Achievers Award (male), whereas Nikita Poudel of Gopi Krishna Group and Milee Shrestha bagged Young Achievers Award (female).
“We are here to celebrate the achievement of the Nepali business fraternity,” said FNCCI president Suraj Vaidya during the awards ceremony.

On the occasion, Gham Power Nepal bagged the commendation letter for Employment Satisfaction, Sipradi Trading for Employ Development and Butwal Power Company for Work Plan Development.

The FNCCI has fixed a set of criteria and performance indicators through multiple and scientific parameters for the award,” chairman of the FNCCI´s productivity and quality committee Saurav Jyoti said, on the occasion.

 The award is expected to inspire organisations to make their products competitive by enhancing their quality,” he said, adding that the award is aimed at encouraging business organisations to improve the quality of their management and deliver customer service excellence.

The FNCCI has been celebrating the entrepreneurship by honouring companies with best practices and services, businessmen and young achievers, who have contributed to the country with the National Excellence Award since 2001.

Nabil Bank supports ICIMOD’s Knowledge Park at Godavari to promote sustainable green technologies and biodiversity conservation

Nabil Bank and International Centre for Integrated Mountain Development (ICIMOD) entered into a three-year partnership to help upgrade facilities at the ICIMOD Knowledge Park at Godavari, a repository for biodiversity resources and a practical venue for testing sustainable technologies and farming practices and demonstrating them to farmers, researchers, students, and development practitioners.

Chief executive of Nabil Bank Anil Gyawali, handed over a a cheque for Rs 1,350,000 ($15,000) to director general of ICIMOD Dr David Molden today.

Nabil Bank is now a Gold Partner to the ICIMOD Knowledge Park at Godavari.

The Knowledge Park attracts over 5,000 visitors a year through activities carried out in the areas of renewable energy; water, vegetation, and soil management; livestock and aquaculture; alternative approaches to income generation; biodiversity conservation; training; and community outreach.

“The private sector is an important development partner for improving the lives of people living in the mountains and, as users of mountain resources, the private sector has a critical role to play in ensuring the long-term green economic growth of the region and in protecting its invaluable resources and biodiversity,” Molden said, on the occasion.

The partnership is expected to encourage other private sector companies to also participate by supporting, engaging, learning and sharing of knowledge on the valuable resources, ecosystem services, and mountain livelihoods that are under threat as a result of climate and socioeconomic changes, he added.

"Nabil Bank has been focusing on promoting public interest by supporting environmental awareness and conservation, poverty alleviation, and economic development as crucial components of its corporate social responsibility,” Gyawali said, adding that the bank is also involved in projects related to health, science and technology, education and sports, and literature, culture and art.