Prithvi Bahadur Pande, chairman and chief executive director of Nepal Investment Bank Limited, defended the proposed merger with Everest Bank Limited which was dropped amid criticism from within his organization.
Addressing the bank’s 24th annual general meeting on Wednesday, Pande said the proposed merger has been put on hold for now. “But the Nepali market will surely demand an amalgamation of the banks in the future,” he added.
The aborted merger was one of the topics discussed at Wednesday’s AGM. The plan was abandoned even before it reached the board after it stirred controversy within the organization. Before the plan was canned, the chairmen of the two banks had signed an initial memorandum of understanding to merge.
It would have been the largest ever merger in Nepal’s banking history. There is no act on mergers and acquisitions in the country, and the existing Bank and Financial Institution Act has made a few provisions regarding mergers. Pande also termed the existing environment for merger not encouraging.
“Apart from the prevailing laws and provisions, the valuation of the respective institutions is another hurdle for amalgamation,” said Pande.
A number of shareholders attending the AGM supported Pande’s position regarding the merger. “With the growing number of banks and financial institutions, merging is the best way to tackle the upcoming challenges in the sector,” said Amrit Shrestha, a shareholder of the bank.
Earlier, Everest Bank chairman B.K. Shrestha had also defended the merger plan at the bank’s AGM. Meanwhile, the AGM of Nepal Investment Bank endorsed the proposal to distribute 25 percent cash dividend from the net profit posted during the last fiscal year. The bank earned a net profit of Rs. 1.26 billion in 2009/10. It was one of the top 10 taxpayers in fiscal 2009/10 with a payment of Rs. 790 million.
The bank said in a press release that it had achieved the highest industry growth in terms of deposits, assets and capital base. “Our deposit base grew from Rs. 46.69 billion to Rs. 50.09 billion making us the largest private sector bank in deposits,” stated the press release. The bank added 83,000 new clients in the last fiscal year.
The bank’s net profit of Rs. 1.26 billion in the last fiscal year was the highest among private sector banks. It issued loans amounting to Rs 40.95 billion while its assets rose from Rs. 53.01 billion to Rs. 57.30 billion last year. “Our loans and advances grew from Rs. 36.8 billion to Rs 40.94 billion, making us the largest lender in Nepal,” said the bank. It said it had a good presence in Malaysia and the Middle East to provide convenient remittance services.
Nepal Investment Bank also qualified to join the Global Trade Finance Programme offered by International Finance Corporation IFC, enabling it to conduct international finance arrangements with a wider range of correspondent banks greatly benefiting its corporate clients.
Nepal Investment Bank has received a trade finance facility of US$ 5 million, one of the largest extended to any Nepali bank, which will enhance support for local enterprises and boost international trade opportunities, it said.
source:ekantipur
Addressing the bank’s 24th annual general meeting on Wednesday, Pande said the proposed merger has been put on hold for now. “But the Nepali market will surely demand an amalgamation of the banks in the future,” he added.
The aborted merger was one of the topics discussed at Wednesday’s AGM. The plan was abandoned even before it reached the board after it stirred controversy within the organization. Before the plan was canned, the chairmen of the two banks had signed an initial memorandum of understanding to merge.
It would have been the largest ever merger in Nepal’s banking history. There is no act on mergers and acquisitions in the country, and the existing Bank and Financial Institution Act has made a few provisions regarding mergers. Pande also termed the existing environment for merger not encouraging.
“Apart from the prevailing laws and provisions, the valuation of the respective institutions is another hurdle for amalgamation,” said Pande.
A number of shareholders attending the AGM supported Pande’s position regarding the merger. “With the growing number of banks and financial institutions, merging is the best way to tackle the upcoming challenges in the sector,” said Amrit Shrestha, a shareholder of the bank.
Earlier, Everest Bank chairman B.K. Shrestha had also defended the merger plan at the bank’s AGM. Meanwhile, the AGM of Nepal Investment Bank endorsed the proposal to distribute 25 percent cash dividend from the net profit posted during the last fiscal year. The bank earned a net profit of Rs. 1.26 billion in 2009/10. It was one of the top 10 taxpayers in fiscal 2009/10 with a payment of Rs. 790 million.
The bank said in a press release that it had achieved the highest industry growth in terms of deposits, assets and capital base. “Our deposit base grew from Rs. 46.69 billion to Rs. 50.09 billion making us the largest private sector bank in deposits,” stated the press release. The bank added 83,000 new clients in the last fiscal year.
The bank’s net profit of Rs. 1.26 billion in the last fiscal year was the highest among private sector banks. It issued loans amounting to Rs 40.95 billion while its assets rose from Rs. 53.01 billion to Rs. 57.30 billion last year. “Our loans and advances grew from Rs. 36.8 billion to Rs 40.94 billion, making us the largest lender in Nepal,” said the bank. It said it had a good presence in Malaysia and the Middle East to provide convenient remittance services.
Nepal Investment Bank also qualified to join the Global Trade Finance Programme offered by International Finance Corporation IFC, enabling it to conduct international finance arrangements with a wider range of correspondent banks greatly benefiting its corporate clients.
Nepal Investment Bank has received a trade finance facility of US$ 5 million, one of the largest extended to any Nepali bank, which will enhance support for local enterprises and boost international trade opportunities, it said.
source:ekantipur
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