NMB Bank, which embarked on a merger spree earlier this year, today signed another deal that would help it consolidate with Prudential Finance Company, a class ‘C’ financial institution.
A Memorandum of Understanding, in this regard, was signed by Kamlesh Kumar Agrawal, a promoter of NMB Bank, and Manoranjan Raman Sharma, a promoter of Prudential Finance.
“We hope the agreement will further strengthen our capital base, consolidate our position in the market and help us penetrate various parts of the country through branches established by financial institutions that have merged with us,” NMB Bank CEO Upendra Poudyal said.
NMB, which has a paid-up capital of Rs two billion, and Prudential, which has a paid-up capital of Rs 483.09 million, will now conduct due diligence audits based on which share swap ratio and paid-up capital of the consolidated unit — which will be named NMB Bank — will be determined.
Earlier on Tuesday, NMB Bank had signed a pact to merge with Clean Energy Development Bank, a national level development bank. Prior to entering into this agreement, NMB, on September 29, had signed a deal to consolidate with Pathibhara Development Bank and Bhrikuti Development Bank.
“All these merger deals will be wrapped up at the same time,” Poudyal said, adding, “NMB has no other merger deal in the pipeline for now.”
Since the introduction of the Merger Bylaw in April 2011, financial institutions have been rapidly consolidating with each other. As of mid-July, 64 institutions had successfully consolidated and merged into 25 entities.