--By TC Correspondent
Nepal Industrial and Commercial (NIC) Bank and Bank of Asia Nepal (BoAN) completed their merger process and commenced joint operation as NIC Asia Bank from Sunday (June 30).
On the occasion, Nepal Rastra Bank Governor congratulated the newly merged NIC Asia Bank Ltd for becoming one of the top five bank of the country as per its size of capital, branch expansion and the like. He added that more responsibilities have been added to the newly merged bank. The main objective of the merger of banks is to increase their competitiveness, he further opined.
He also asked to increase the investment of banks’ credit on manufacturing sector which will be beneficial for the financial stability of banks for long term.
This is the first ever merger between two commercial banks in the country’s banking history. After this, the number of commercial banks comes down to 31. Speaking at the same programme, Sashin Joshi, the CEO of NIC Asia Bank Limited asked for reduction of the corporate tax rate to 20 percent from existing 30 percent for next five years for merged banks to encourage further consolidation in the banking industry.
In the merger process, 13 branches of the banks at same locations have been amalgamated. Nine branches from outside Kathmandu Valley and four within the valley are thus amalgamated. Similarly, BoAN registered office and NIC Bank corporate office are converted into branch offices. The corporate office of the merged ‘NIC Asia Bank Limited’ is located at Trade Tower, Thapathali, Kathmandu. Similarly, the newly merged bank is also planning to open new branches in other areas within the next year to make up for the number of branches reduced by this amalgamation.
The two banks currently have 65 branches, 36 of NIC and 29 of BoAN. The bank has a total of 644 employees and CEO Sachin Joshi said “nobody will be laid off”.
The merged entity has a paid-up capital of Rs 2.31 billion, however, its reserves will make the actual capital size exactly double of the figure. Its deposit size is Rs 39 billion and credit Rs 33 billion, making it the fifth largest commercial bank of the country.
After the merger, the existing shareholders of BoAN will get additional shares of newly merged NIC Asia Bank on a 2:1 ratio.
