Global IME Bank and Commerz and Trust Bank Nepal started unified business transactions as Global IME Bank from today.
Though it is a complete acquisition of Commerz and Trust Bank Nepal by Global IME Bank, the process is still called merger due to lack of Acquisition law in the country.
The transaction of the merged Global IME Bank – the first ‘merger’ of two commercial banks promoted by separate groups – is second merger after NIC Bank and Bank of Asia Nepal merger that largely belonged to the same promoter groups.
This is the fifth merger by Global Bank, after it first merged with IME Financial Institutions two years ago to become Global IME Bank.
Global IME Bank then merged with Lord Buddha Finance, Social Development Bank, Gulmi Development Bank – before finally merging with Commerz and Trust today – as the Global IME Bank.
The merger of seven year old Global IME and three year old Commerz and Trust Bank has made it largest bank in terms of branch network, apart from increasing capital fund to Rs 6 billion, and paid-up capital to Rs 4.10 billion. “The deposit mobilisation stood at Rs 49 billion and credit disbursement stood at Rs 41 billion,” informed chairman of the merged Global IME Bank Chandra Dhakal.
The number of its branches, branchless banking services and extension counters has reached 120, he said, adding that the customer base has reached 500,000.
Addressing the inauguration ceremony, here today, finance minister Ram Sharan Mahat said mergers are necessary to reduce the operating cost and also to become more competitive regionally and globally.
Asking the banks to lead economic development, he urged then to invest in new emerging areas and take lending policy to promote new entrepreneurs to contribute to the economic growth.
Likewise, central bank governor Dr Yubaraj Khatiwada said bank mergers are necessary to strengthen the sector. “Small banks cannot take much risk to invest in big infrastructure projects due to low capital base,” he said, asking the banks and financial institutions to consolidate to strengthen their capital so that they can invest in a big way.
He also informed that the central bank is soon bring Acquisition Bylaw that will help banks and financial institutions acquire other financial institutions.
Global IME Bank and Commerz and Trust Bank Nepal started merger process back in November 2013. Both are listed banks in the secondary market. But after the merger, the Commerz and Trust Bank Nepal stock that were listed at Rs 100 per unit will be priced Rs 65 per unit according to the merger agreement.