Nepal Rastra Bank Gives Letter of Intent to Merger Between Nepal Investment Bank Ltd. (NIB) and Himalayan Bank Ltd. (HBL)

Nepal Rastra Bank has given a letter of intent to the merger between Nepal Investment Bank Ltd. (NIB) and Himalayan Bank Ltd. (HBL). The meeting of the board of the central bank held this Monday decided on the matter. This means that the central bank is in peace with allowing the banks to initiate merger procedures. 

The exchange has already halted the trading of Nepal Investment Bank Ltd. (NIB) and Himalayan Bank Ltd. (HBL) since the companies signed a merger agreement with each other. The banks are merging to become the largest bank in the country in terms of paid-up capital.

With the intention of strengthening the banking sector of Nepal and in line with Nepal Rastra Banks (NRB) encouragement through their Merger and Acquisition policy Nepal Investment Bank Ltd. (NIB) and Himalayan Bank Ltd. (HBL) have jointly signed an MoU (memorandum of understanding) to go into a merger. The signing of the MoU was done by the Chairman of Nepal Investment Bank Mr. Prithvi Bahadur Pandé alongside the Chairman of Himalayan Bank Mr. Tulsi Prasad Gautam. This development has officially paved the way to complete formalities before the process of the start of joint operations between the two commercial banks.

After the merger, the banks will be known with the unifying name of “Himalayan and Nepal Investment Bank Ltd.”. Mr. Prithvi Bahadur Pandé will be retained as the Chairman of the bank while Mr. Ashoke Shamsher Rana will be the Chief Executive Officer (CEO). Similarly, the Board members’ post-merger will be comprised of 3 members each from both banks while also accommodating an independent member thus making a total of 7 members on the Board.

Nepal Investment Bank and Himalayan Bank are two A-class commercial banks, therefore the prospect of a merger between the two will make it the biggest bank in the history of the Nepalese banking industry. At present, the paid-up capital of Nepal Investment Bank stands at 16.26 billion whereas Himalayan Bank's paid-up capital amounts to 10.68 billion. After the merger, the combined paid-up capital of the banks will reach a staggering 26.14 billion making it the bank with the highest paid-up capital in the country.

The last traded price as of 13th May 2021, of NIB, stood at Rs 460 and of HBLat Rs 484 per share.