KATHMANDU, JUNE 10

Nepal Investment Bank Ltd and Mega Bank Nepal have initiated the process of going for merger to create a banking behemoth with a total paid-up capital of Rs 34.43 billion.

NIBL Chairperson Prithvi Bahadur Pandé and Mega Bank Nepal Chairperson Bhoj Bahadur Shah signed a memorandum of understanding to take forward the merger process at a programme held here today.

Prithvi Bahadur Pandé will be the chairperson, while Jyoti Pandey will be the chief executive of the merged entity, which will be named 'Nepal Investment Mega Bank Ltd'.

The new executive committee will comprise representatives from the current executive committees of NIBL and Mega Bank.

The paid-up capital of NIBL currently stands at Rs 18.30 billion, while that of Mega Bank Nepal is Rs 16.12 billion.

Also, as the reserve fund of NIBL stands at Rs 14.82 billion and that of Mega Bank at Rs 5.92 billion, the credit portfolio of NIBL is Rs 473.46 billion and that of Mega Bank Rs 150.46 billion, and NIBL has Rs 12.01 billion in deposits to add to Mega Bank's Rs 152.08 billion, the merged entity will be a banking giant in the country in every aspect.

The share swap ratio for NIBL and Mega Bank has been set at 100:90.

Earlier, NIBL had inked an MoU for merger with Himalayan Bank. However, the planned merger fell through when the annual general meeting of the HBL rejected the plan.

The due diligence audit had suggested a swap ratio of 1:1 for the merger between NIBL and HBL.

The actualisation of the merger would have made it the biggest commercial bank in the history of the Nepali banking industry in terms of paid-up capital of Rs 26.94 billion. The institutions would have operated jointly under the name of 'Himalayan and Nepal Investment Bank Ltd'.

A version of this article appears in the print on June 11, 2022, of The Himalayan Times.