Habib Bank Gets NRB Nod to Offload Himalayan Stake

Nepal Rastra Bank (NRB) has approved Pakistan’s Habib Bank to sell its stake in Himalayan Bank to National Life Insurance Company.

Under the agreement reached in August, Habib Bank will transfer 28,012,447 units of promoter shares to National Life at Rs 118.88 per share. The central bank has now authorised the transaction in line with that agreement.

“We have received approval from the central bank to sell Habib’s shares to National Life,” said Ashoke SJB Rana, CEO of Himalayan Bank. “The share transfer process will now move forward.”

According to the Bank and Financial Institutions Act (BAFIA), promoter shares cannot be sold within the first five years of a bank’s operation. Thereafter, such shares can only be sold outside the promoter group under specific regulatory conditions. Any institutional purchase exceeding a 2 percent stake also requires NRB approval.

Himalayan Bank had issued a 35-day notice on June 13, inviting existing promoter shareholders to buy Habib’s stake in the Class ‘A’ commercial bank. While the minimum offer price was Rs 112.80 per share, National Life offered Rs 6.08 more.

National Life currently holds 1.25 percent of Himalayan Bank’s shares. Once the deal concludes, its ownership will rise to about 14 percent.

This marks Habib Bank’s third attempt to offload its stake. In December 2023, it signed a share purchase agreement with Himalayan Reinsurance Company at Rs 130 per share, but the proposal was rejected by NRB, leading Habib to withdraw the application.

Earlier, Habib held a 20 percent stake in Himalayan Bank, which was reduced to 12 percent following its merger with Civil Bank Ltd.

About four years ago, Habib had also signed a deal with the UK-based Commonwealth Development Corporation (CDC) to sell its stake, but that plan collapsed after opposition from some Himalayan Bank board members.