Kathmandu, January 25

Civil Bank and International Leasing and Finance Company (ILFC) have formally initiated the merger process.

A memorandum of understanding (MoU) was signed in this regard between Ichchha Raj Tamang, chairman of Civil Bank, and Anjay Bahadur Shah, chairman of ILFC, amidst a programme held here today, says a statement issued by Civil Bank.

Following the signing of the MoU, a joint merger committee has been established. “It will conduct due diligence audits of both the institutions and propose a share swap ratio,” Civil Bank CEO Kishore Maharjan told The Himalayan Times.

The name of the merged unit will be Civil Bank. “The current composition of the board of directors and senior management of Civil Bank will not change after the merger,” says the statement.

Civil Bank, a class ‘A’ financial institution, had paid-up capital of Rs 2.89 billion, deposit of Rs 27.37 billion and credit portfolio of Rs 23.49 billion as of the first quarter of the current fiscal year. The capital adequacy ratio of the bank stands at 12.93 per cent and the portion of non-performing loans to total loans hovers around 2.50 per cent. The bank generated net profit of Rs 58.75 million in the first quarter of this fiscal year.

ILFC, a class ‘B’ financial institution, on the other hand, had a paid-up capital of Rs 2.01 billion, deposit of Rs 1.36 billion and credit portfolio of Rs 1.62 billion as of first quarter of this fiscal. The bank generated a net profit of Rs 4.42 million in the first quarter of this fiscal year.

“After the merger, the consolidated unit will have paid-up capital of Rs 5.09 billion, deposit of Rs 28.22 billion, credit portfolio of Rs 25.14 billion and total assets of Rs 36.93 billion,” says the statement. The merged unit will have 51 branch offices.