In what could be described as the ‘week of consolidation’ in Nepali banking, one more acquisition has taken a logical conclusion on Tuesday. Prabhu Bank on Monday completed its acquisition of Century Commercial Bank to commence the integrated business.
Prabhu’s acquisition of Century is the first acquisition in the banking sector this year. The last was Nabil Bank’s acquisition of the Nepal Bangladesh Bank in 2022.
Prabhu Bank started the integrated business five months after signing an acquisition agreement with Century. Both banks signed the acquisition agreement on August 25, 2022, agreeing on a share swap ratio of 1:1.
Post-acquisition, the paid-up capital of Prabhu Bank has reached Rs 30 billion while deposits and extension of loans stand at Rs 285 billion and Rs 255 billion. The bank now has a base of three million customers.
Addressing a function held to mark the start of integrated business, Prabhu Bank CEO Ashok Sherchan said that the bank has written a new chapter in the Nepali banking sector with this acquisition.
Sherchan also promised to further strengthen the new and digital business after acquiring Century Bank. According to him, the bank post-acquisition is in the sixth position in terms of total assets. “In terms of lending, the bank is in the seventh position while in deposit mobilization, the bank is in the sixth position,” said Sherchan.
Post-acquisition, Prabhu Bank has a seven-member board, of which four are from Prabhu Bank and three from Century Bank. Sherchan has been appointed as the CEO of Prabhu Bank, while Manoj Neupane, CEO of Century Bank, has become the Senior Deputy CEO.
Laxmi Bank, Sunrise Bank ink merger deal
Laxmi Bank and Sunrise Bank have signed a memorandum of understanding (MoU) for a merger with a swap ratio of 1:1. The MoU was signed by the Chairman of Laxmi Bank, Raman Nepal, and the Chairman of Sunrise Bank, Motilal Dugar on Monday.
A merger committee, comprising four members (two each from both banks) has been formed to finalize the merger. The committee includes Dr. Manish Thapa and Swati Rungata from Laxmi Bank, and Sarda Sharma and Deepak Nepal from Sunrise Bank.
The merged entity will be named “Laxmi Sunrise Bank”, and the swap ratio may change after the due diligence audit (DDA) is completed. Both banks are open to discussions regarding the chief executive officer and board chair of the merged entity.
According to the latest financial details, Laxmi Bank has a paid-up capital of Rs 11.55 billion, while Sunrise Bank’s paid-up capital is Rs 10.11 billion. Laxmi Bank has also floated a loan of Rs 129 billion, while Sunrise Bank has floated a loan of Rs 119 billion. The deposit collection of Laxmi Bank stands at Rs 140 billion, while that of Sunrise Bank is at Rs 125 billion.
The merger committee has stated that both banks are preparing to complete the merger process within this fiscal year and will begin the formal process following a green signal from the central bank.
Raman Nepal, the chairman of Laxmi Bank, confirmed that the name of the merged entity will be “Laxmi Sunrise Bank” and that the swap ratio will be fixed only after the DDA is completed.