Vibor Bikas Bank launches new merger talks

KATHMANDU, JAN 04 -

After its plan to bring in a foreign partner could not materialise, Vibor Bikas Bank has initiated consultations with other financial institutions for possible merger, apart from its announced amalgamation plan with Bhajuratna Finance and Savings.

Vibor has already completed all due procedures for the unification with Bhajuratna.

The rationale behind exploring other merger possibilities, according to Vibor CEO

Ajay Ghimire, is to strengthen the bank.

“Unless we raise the capital base significantly, it will be tough to compete in the market,” said Ghimire. “We will try to bring in foreign partner after strengthening Vibor internally.”

The bank says it is currently holding discussions with a few development banks. “But we are also open to merge with finance companies,” said Ghimire, adding that his bank is also open to be acquired by commercial banks for the best interest of shareholders.

Currently, Vibor’s paid-up capital is at Rs 680 million. Following the merger with Bhajuratna, the figure will reach around Rs 950 million. It seeks to increase the capital further by merging with another BFI.

Vibor had planned to bring in a foreign partner and repay loans taken from NRB, but after the plan failed, it repaid the amount by selling its property and taking loans from other BFIs.

Vibor that is going through acute liquidity crunch has even been forced to sell its good loans to FIs to get liquidity. But Ghimire said as they have sold just one good loan, it won’t affect bank’s health and his main focus will be on restoring public confidence.

According NRB officials, the bank has relatively higher exposure to the realty sector. However, the officials said its investment in the sector is within the set limit. Its subsidiary Vibor Properties has managed all its investment in the realty sector. “It may affect the bank if the realty market remains shaky,” said an official.

Source: Kanitpur