दृष्टिकोण

NIC Bank, BoAN sign merger agreement

Six months after signing a memorandum of understanding (MoU),NIC Bank and Bank of Asia Nepal (BoAN) signed a merger agreement on Thursday.
NIC chairman Jagadish Prasad Agrawal and BoAN Chairman Trilok Chand Agrawal signed the pact in the presence of the banks’ directors, promoters, officials and joint merger committee members, NIC Bank said in a press statement.However, the statement made it clear that the merger is subject to approval by the banks’ the annual general meetings (AGMs) and regulatory authorities.
NIC Bank CEO Sashin Joshi said the banks would hold separate AGMs within the next four-five months. “We will then apply to the central bank for its approval,” he said. “We hope the whole process will complete before the end of the current fiscal year.”
After the amalgamation, the merged entity’s capital fund will be around Rs 5 billion, paid-up around Rs 3.31 billion and the number of branches will reach 65.
At present, NIC ’s paid-up capital stands at Rs 1.31 billion, while BoAN has Rs 2 billion. NIC has 36 branches and BoAN maintains 29. The number of employees of the merged-entity will be more than 700, which the banks have no plans to cut down, according to Joshi.
After the signing of the MoU, the banks’ share trading has been suspended. At that time NIC shares were trading at Rs 468, while BoAN’s shares were fetching Rs 228.
Last week, the central bank extended the deadline for filing the merger application by three months as per the banks’ request.
The merger guideline issued by the central bank says a merger process should complete within six
months after the signing of MoU, but the central bank could extend the deadline if need be.
Joshi said the due diligence audit (DDA) of both the banks have been completed, but he refused to divulge the DDA details, saying it would first be presented at the AGM.
If successful, it would be the first merger between two commercial banks in the country’s banking history. The press release said the merger will create one of the largest banks in the country in terms of capital fund, balance-sheet size, branch/ATM network, customers and employees.
Talks on NIC -BoAN merger had been making the rounds ever since the central bank adopted a policy that sought to persuade banks promoted by same group/individual to merge into a single entity. There are nine common promoters in the banks, and if family relation is taken into account, the number might increase.

The central bank had asked the promoters of both the banks to go for merger. Since then, the banks had been exploring merger possibilities between them as well as with other domestic and international financial institutions.

source-ekantipur