Nepse halts Global IME Bank share trading

KATHMANDU, MAY 16:

Nepal Stock Exchange (Nepse) has suspended share trading of Global IME Bank following the bank’s plan to acquire Social Development Bank.

Global IME Bank and Social Development Bank had signed a memorandum of understanding for a merger, yesterday.

Global IME was formed last year following a merger between a commercial bank — Global Bank — and two finance companies — IME Financial Institution and Lord Buddha Finance. After the completion of the current merger process, Social Development Bank will be the fourth entity to get merged with Global IME Bank.

Global IME has 24.85 million units listed at Nepse with market capitalisation worth Rs 9.4 billion.

Its stocks were last traded at Rs 447 per unit yesterday. Social Development Bank has not offered its shares to the public.

Social Development Bank, that started operations in October, 2010, had been struggling. With non-performing assets higher than 32 per cent, in the second quarter of the current fiscal year, the class ‘C’ financial institutions’ balance sheet shows a loss of Rs 11.6 million. Its paid up capital stands at Rs 382.6 million, however, its reserve is in a deficit by Rs 132 million.

Global IME Bank, that has a paid up capital of Rs 2.25 billion, has been able to earn Rs 361 million as profit in the third quarter. It collected deposits worth Rs 30 billion and floated loans worth Rs 25 billion in the period.

Global IME chairman Chandra Prasad Dhakal and Social Development Bank chairman Krishna Gopal Shrestha signed the Memorandum of Understanding on behalf of their respective institutions on Tuesday and forwarded it to the central bank — the regulator of the monetary market.

Source: THT