Merged NIC Asia Bank to start operation from Sunday

KATHMANDU, JUN 25 -

NIC Bank and Bank of Asia will complete their merger process and commence operation as NIC Asia Bank from Sunday. This is the first ever merger between two commercial bank s in the country’s bank ing history.

NIC CEO Sashin Joshi said the merged bank will come into operation from June 30 as a single entity. He said assimilation of two balance sheets has been completed and a single balance sheet will be published at the end of the fiscal year.

The merged bank will not carry out any bank ing transactions on Friday to give time for completing data migration process which is expected to complete by Saturday. “We have already received approval from the Nepal Rastra Bank for suspension of transactions on Friday,” he said.

In the merger process, 13 branches of the bank s at same locations have been amalgamated. “Same number of branches will be expanded in other areas within the next year,” said Joshi.

The two bank s currently have 65 branches — 36 NIC branches and 29 BoAN outlets. The bank s have a combined 650 employees and Joshi said “nobody will be laid off”.

After the merger, the merged entity will have a paid-up capital of Rs 2.31 billion, but its reserves will make the actual capital size just double of the figure. Its deposit size will be Rs 39 billion and credit Rs 33 billion, making it the fifth largest commercial bank of the country, according to Joshi.

After the merged entity starts operation, it will ask the central bank to lift the ban on share transactions in the secondary market.

The central bank had given final approval to the merger last April. The bank s promoted largely by the same group had signed a memorandum of understanding for their amalgamation on June 28, 2012.

Talks on merger between these two bank s started after the central bank adopted a policy of persuading bank s run by same promoters to merge into a single entity. There are nine common promoters in the bank s and if family relation is taken into account, the number might increase.

Source: The Kathmandu Post