Civil Bank, a Class ‘A’ financial institution, and International Leasing & Finance Company Limited (ILFCO), a Class ‘C’ financial institution, have completed their merger process and are all set to commence joint operation on Monday (October 17).

The name of the consolidated unit will be Civil Bank, which will have 51 branch offices across the country, the bank said in a statement on Sunday. Also, the current composition of the board of directors and senior management of Civil Bank will remain unchanged. “The merger will enable the bank to expand its business and invest in infrastructure and other industrial projects,”

Civil Bank CEO Kishore Maharjan said in the statement. Civil Bank had a paid-up capital of Rs3.3 billion as of mid-July, while the ILFCO maintained a paid-up capital of Rs2.1 billion in the same period, according to Nepal Rastra Bank (NRB).

As of mid-July, Civil Bank had collected Rs31.6 billion in deposits and maintained a credit portfolio of Rs26.2 billion. ILFCO, on the other hand, had mobilised deposits of Rs1.1 billion as of mid-July and disbursed Rs1.1 billion in loans. The merger between the two institutions comes at a time when NRB, the banking sector regulator, has directed banks and financial institutions to raise their minimum paid-up capital to Rs8 billion by mid-July 2017.

To meet the new regulatory capital requirement, Civil Bank has signed a memorandum of understanding for acquisition of Unique Finance Limited and Hama Merchant & Finance Limited. Unique Finance has a paid-up capital of Rs230 million, while Hama has a paid-up capital of Rs220 million. After these proposed acquisitions, Civil Bank’s paid-up capital will hover around Rs5.54 billion.

“The bank shall issue bonus and rights shares and also continue to merge with or acquire other institutions simultaneously to meet the minimum paid-up requirement of Rs8 billion,” the statement adds.

Century to acquire Arniko

KATHMANDU: Century Commercial Bank has formally initiated the process to acquire Dhulikhel-based Arniko Development Bank. The two institutions on Sunday signed a memorandum of understanding (MoU) in this regard. Century is mulling over wrapping up the acquisition process within mid-February, the bank said in a statement on Sunday.

Century had previously signed an MoU to acquire Innovative Development Bank. Century’s paid-up capital will cross Rs5 billion after it acquires these

two institutions, adds the statement. Century, which currently has a paid-up capital of Rs2.84 billion, intends to issue rights shares worth Rs850 million this fiscal year.