Civil Bank today formally announced its merger plan with two financial institutions.
The bank signed a agreements with Axis Development Bank and Civil Merchant Finance – a class B and a class C financial institutions – to start merger process.
Civil Bank chairman Ichcha Raj Tamang, Axis Development Bank chairman Bidur Dhamala and Civil Merchant Finance director Arun Raj Shrestha signed the merger agreement here today on behalf of their respective financial institutions.
Though, its is called a merger, Civil Bank is acquiring the two financial institutions, and the merged entity will also be called Civil Bank.
The share swap ratio among them has been, however, not finalised yet.
The proposed merged Civil Bank’s total paid up capital will be over Rs 2.88 billion, according to the statements of the three financial institutions.
The paid-up capital of the Civil Bank stands at Rs 2 billion, whereas Axis Development Bank has Rs 718.10 million and Civil Merchant Finance has Rs 166.50 million paid up capital.
The total number of branch network of the merged entity will be 32, according to Civil Bank that has, currently 20, Axis Development Bank has also 20 and Civil Merchant Finance Company has two branches, respectively.
Likewise the number of accounts will also exceed seven million after the merger, the bank said, expecting to contribute exponential growth in returns, with a big balance sheet size.
Civil Bank and Civil Merchant Finance are promoted by the same group – Civil Group – and the central bank has been encouraging the merger of the financial institutions promoted by the same group.
Similarly, Axis Development Bank is a merged entity – between Pashupati Development Bank and Udhyam Bikas Bank – nearly a year ago.
Following the official announcement of the merger, Nepal Stock Exchange (Nepse) has suspended the share trading of all the three companies.
Civil Bank’s shares were traded at around Rs 150 per unit, Axis Development Bank was trading at Rs 94 per unit and Civil Finance Company was trading at Rs 96 per unit before the suspension of the trading.Nepse has listed 20,000,000 units of Civil Bank’s shares, whereas Axis Development Bank has 7,000,000 units and Civil Finance Company has 1,300,000 units of its shares listed at the Nepse.