Nepal Grameen Bikash Bank starts integrated business; share listing soon

ShareSansar, August 19:

All the five state-run Grameen Bikas Banks, which recently merged to form Nepal Grameen Bank has started the integrated business.

“Though we were supposed to start the integrated business from 1st of Bhadra (August 16), we could start it from yesterday only owing to public holidays in between,” Chief Executive Officer of Pashimanchal Grameen Bikas Bank Dharma Raj Pandey, who has been retained as the CEO of the merged entity, told ShareSansar today.

Pandey further informed that they will formally notify the central bank, Sebon and Nepse about the integrated business within a week.

“We need to amend our regulations to appoint the RTS and we are also working on that,” he added. “Once we appoint the RTS, which we intend to do as soon as possible, we will immediately sign agreement with Nepse for share listing.

He also reconfirmed that the swap ratio for all the five banks was finalized as fixed by the last DDA held back in May last year, which is as follows: 1.02 of Purbanchal, 1.18 for Madhyamanchal,  275.8 for Pashimancal,  77.78 for Madhya Pashimancal and 1.02 for Sudur Pashimancal Grameen Bikas Bank, in which  the central bank has the highest stake.

The paid-up of the merged entity now stands at Rs 40.70, after adjusting 15 percent bonus share recently endorsed by Pashimanchal.

According to him, in the total paid-up capital of Nepal Grameen Bikash Bank, Pashimancal alone has contributed Rs 29.08 crore.

He further informed that they were now expecting the government to channel Rs 15 crore offered by the World Bank.

The class ‘D’ BFIs had jointly applied with the central bank for the integrated business on April 25.


Why separate Q4 report of Pashimanchal?  

Meanwhile, Nepal Grameen Grameen Bikash Bank has published today the unaudited financial report of Paschimanchal alone.

Asked why didn’t they publish a consolidated financial report of all the five merged banks, CEO Pandey said that this was because all of them were separately conducting their business till the end of the last fiscal year.

“Since Paschimanchal is the only bank one among the five former Grameen Bikash Banks to issue public shares, it had to publish its quarterly report in mass media while it was not mandatory for the rest,” Pandey further explained.

Paschimanchal has reported a net profit of Rs 2.19 crore by the end of the fourth quarter down from Rs 3.90 crore – largely due to higher operating expenses, especially staff expenses.


The future plan

CEO Pandey informed that plans were afoot to further raise the paid-up capital of Nepal Grameen Bikash Bank additional Rs 10 crore.

“Our target is to shore up the paid-up capital to Rs 65 crore and the authorized capital to Rs 1 arba in the near future,” he added.

After the merger, public holding in the Grameen Bikas Bank will stand at around Rs 10 crore and the rest of the stake will be with the government, central bank and a few commercial banks.

The merged entity will have an impressive coverage of 56 districts with 183 branches, and the balance sheet-size of Rs 3.65 arba.

The five grameen bikas banks had signed a MoU for the merger back on October 11, 2012.

When asked about major plans following the integrated business, the incumbent CEO of Pashimanchal that has been posting good profit, said that there overarching goal is to ensure that the merged entity started to make good profit within four years.

“We are planning to get chunk of the soft loan, besides executing VRS for the overstaffed bank, and setting up a regional office in the capital, inter alias for the same,” Pandey explained.

It may also be noted that the combined loss of the former banks stands at Rs 19.80 crore and quarterly loss at loss is Rs 5.70 crore.