IFIC Bank to sell entire stake in Nepal lender

IFIC Bank is set to sell its more than 40 per cent stake in a Nepalese bank as it no longer sees its business in the Himalayan Kingdom viable.  

Nabil Bank, a private lender in Nepal, will acquire Nepal Bangladesh Bank Ltd (NBBL) where IFIC Bank holds 40.41 per cent stake.

IFIC Bank has already taken decision to sell the stake to withdraw its investment.

The bank has commenced negotiation to sell its entire shares of NBBL, according to a regulatory filing by IFIC Bank on the website of the Dhaka Stock Exchange (DSE) yesterday.

A memorandum of understanding has been signed in this regard with a prospective buyer, it said. IFIC holds around 4.12 crore shares at NBBL.

Binod Chaudhary, the founding investor of Nabil Bank, will buy the shares of IFIC Bank, according to media reports in Nepal. A joint merger committee has been formed to complete the merger of the two banks.

Chaudhary, the richest man in Nepal as well as the first billionaire in the country, will buy the shares after the merger deal.

The MoU was signed on December 29, and two separate meetings were held at IFIC Bank and NBBL a day later. A number of officials of IFIC Bank said their investment was not viable. They, however, gave no reasons.

NBBL announced 15.50 per cent dividend for the last fiscal year, according to Fiscal Nepal, a news portal in the country.

NBBL is a joint venture company, which started its banking operation in 1994. IFIC Bank held around 50 per cent shares of the bank at the time.

The share price of NBBL hit a positive circuit on Wednesday after the news of merger came out. Its share closed 9.8 per cent higher at 402 Nepalese rupee on the Nepal Stock Exchange Ltd, said New Business Age, a monthly magazine.

IFIC Bank shares rose 7.69 per cent to Tk 18.20 on the DSE yesterday.