December 23: The 36th Annual General Meeting (AGM) of Nepal Investment Bank Limited (NIBL) on Thursday endorsed the proposal for a merger of the bank with Mega Bank.

The bank informed that they will soon launch integrated transactions following the conclusion of the merger process.

NIBL and Mega Bank had signed a final draft of Memorandum of Understanding (MoU) for merger in late November.  As per the deadline set by the Nepal Rastra Bank (NRB), the banks can go for merger till January 6, 2023 to receive benefits announced by the central bank.

According to merger committee member Gopal Khanal, who is also a member of the Board of Directors of Mega Bank, they plan to merge and launch integrated transactions within the deadline given by the central bank.

The banks signed a preliminary merger agreement with a swap ratio of 100: 90 on June 10. One unit of share of the NIBL will be equivalent to 0.90 of Mega Bank.

NIBL has a paid-up capital is Rs 18.31 billion while that of Mega Bank is Rs 16.2 billion.    

Following the merger, the new entity is to be named Nepal Investment Mega Bank and Prithvi Bahadur Pande will be its chair and Jyoti Pandey the Chief Executive Officer.

Meanwhile, NIBL’s AGM also endorsed the proposal to distribute 11 percent dividend to its shareholders. The dividend endorsed by the bank includes four percent bonus share and seven percent cash dividend. 

The NIBL with Rs 19 billion market capitalisation earned Rs 6.2 billion in operational profit, and Rs 3.7 billion in net profit in the last fiscal year (FY 2021/22).    

The bank’s deposit collection has slightly increased and stood at Rs 186.7 billion in the last FY against Rs 179.4 billion in the FY 2020/21. Similarly, its credit flow has also gone up slightly to reach Rs 164.8 billion in the same period as compared to Rs 161.9 billion in the FY 2020/21.