Global IME Bank, Commerz and Trust Bank Nepal to start operating as one unit after third quarter
Global IME Bank and Commerz and Trust Bank Nepal today signed the final Memorandum of Understanding for merger.
The merged entity in the name of Global IME Bank will start operating as a single unit after the third quarter, said Global IME Chairman Chandra Prasad Dhakal after signing the memorandum of understanding with chairman of Commerz and Trust Bank Nepal Shovakar Neupane, on behalf of their respective institutions here today.
One of the promoters from the Commerz and Trust Bank Nepal will represent in the board, Dhakal, said, adding that the remaining board members and the chief executive of the current Global IME Bank will continue to serve the institute.
Though, it is the second merger among the two commercial banks after NIC Bank and Bank of Asia Nepal (currently NIC Bank of Asia) lat July, the merger will be the first of its kind in terms of different promoters in two institutions.
By mid-April, the two Class 'A' banks will be completely merged, he added.
Both the commercial banks have scheduled their annual general meetings next month to get their merger proposals endorsed by the shareholders.
Commerz and Trust is holding its AGM on March 3, whereas Global IME has scheduled its AGM for March 5.
The merged entity is planning to publish a single merged third quarterly financial report,” Dhakal added.
The merger will help increase paid up capital that will give us more room for investment in productive sectors and large-scale projects,” Dhakal said.
The merged Global IME Bank will have Rs 4.10 billion paid-up capital.
Global IME Bank had earlier merged with two Class 'C' financial institutions –IME Finance and Lord Buddha Finance – to form Global IME Bank. Later, it merged with Social Development Bank and Gulmi Development Bank too.
After the central bank's initiation, the banks and financial institutions have been taking merger as a safe landing due to shrinking market size and and also to reduce operating cost.
The central bank had issued Merger Bylaws in May 2011 to facilitate the mergers, though it is planning to bring Acquisition Bylaw soon.
Currently, some 43 banks and financial institutions are planning mergers to become 18 institutions. Likewise, some 23 banks and financial institutions have taken Letter of Intent (LoI) from the central bank to merge.