Global IME, Commerz and Trust Agree Merger

Global IME, Commerz and Trust Agree Merger

March 10, 2014, 5:45 p.m. Published in Magazine Issue: Vol: 07 No. -17 Mar. 07- 2014 (Falgun 23, 2070)

Global IME Bank and Commerz and Trust Bank have signed the final Memorandum of Understanding (MoU) for their merger. Global IME chairman Chandra Prasad Dhakal and Commerz and Trust Bank chair Shovakar Neupane signed the MoU on behalf of their respective parties.

“We´ve agreed to retain the chairman and CEO of Global IME Bank. A board member of Commerz and Trust Bank will be inducted in the merged entity,” said Dhakal. The two Class ´A´ banks have agreed to complete the merger by mid-April. Both the banks have scheduled their annual general meetings (AGMs) next month to get their merger proposals endorsed. While Commerz and Trust was holding its AGM on March 3. The AGM of Global IME was slated for March 5.

“We decided to go for merger as it increases our capital base as well as enhance our capacity to invest in large-scale projects,” Dhakal said, adding, “The merger will become a merger in real sense because we are merging with new partners which will bring synergy in the banking system.”

Post-merger Global IME Bank will be the largest private bank in the country in terms of paid-up capital, which will be in tune of Rs 4.1 billion.  This would be the second merger of commercial banks in the country. Earlier, NIC Bank and Bank of Asia merged to form NIC Asia Bank in July last year.

Banks and financial institutions (BFIs) are on a merger spree after Nepal Rastra Bank (NRB), the central bank, issued Merger Bylaws in May 2011. Since then, a total of 43 BFIs have undergone mergers to form 18 institutions.

Dhakal also said there won´t be any complications after the merger as Global IME has undergone mergers in the past as well. Global Bank first underwent merger with two Class ´C´ financial institutions -- IME Finance and Lord Buddha Finance - to form Global IME Bank. Later, it merged with Social Development Bank and Gulmi Development Bank.

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