KATHMANDU, July 13: Himalayan Bank Limited (HBL) is acquiring Civil Bank Limited (CBL), with both the banks signing a memorandum of understanding for the acquisition on Wednesday.
HBL Chairman Prachanda Bahadur Shrestha and CBL Chairman Pratap Jung Pandey inked an agreement to this effect. The swap ratio will remain at 100:81 while the deputy chief executive officer of the unified entity will be hired from the CBL, according to the agreement.
In this regard, both the banks conducted their board meetings on Thursday. The HBL board meeting is reported to have given the go-ahead for the acquisition. The unified entity to be formed after the acquisition will be carrying out joint transactions in the name of Himalayan Bank.
Similarly, the unified entity will be named as Himalayan Bank Limited and the existing board members will lead the bank after acquisition. The officials of the CBL will be retained in their current positions, according to the agreement.
Last week, these banks were supposed to sign the MoU, which could not materialize in the last hour. Following the development, Nepal Stock Exchange even stepped up to take action against these two banks on suspicion of leaking information of acquisition for insider trading.
Earlier, HBL attempted to get merged with Nepal Investment Bank Limited, which however, failed in the last hour of the merger process. While former finance minister Janardan Sharma and HBL’s former chairman Tulasi Prasad Gautam were even dragged into a controversy for this failure, the lack of consensus on the swap ratio of the two banks was also seen as the main reason behind the failed merger.