M&A Trends and Impacts in Nepal’s Banking Sector: How Banks Change and Grow

Spread the love

Banks are important institutions that help people and businesses with their financial needs. They provide services such as saving, lending, investing, and transferring money. In Nepal, there are many banks that offer different kinds of services to their customers. However, in recent years, some banks have decided to join together or take over other banks. This is called merger and acquisition (M&A).

M&A is a process where two or more banks become one bank, or one bank buys another bank. The main reason for doing M&A is to make the banks stronger, bigger, and more competitive. The Nepal Rastra Bank (NRB), which is the central bank of Nepal, made a rule in 2011 that encouraged banks to do M&A. The NRB wanted to make the banking sector more stable and efficient.

In this article, we will learn more about how banks in Nepal do M&A. We will see a list of some of the M&A that have happened, how they affect the banking industry, and which banks have chosen not to do M&A.

The M&A Trend

Many banks in Nepal have followed the NRB’s rule and done M&A with other banks. This has changed the banking industry a lot, as there are fewer but bigger and stronger banks now. These banks can offer more services and compete better with other banks. Here are the exclusive list of the M&A that have happened in Nepali Banking Sector:

S.N. Companies Merger/Acquisition Company Name’s After Merger
1 Bank of Kathmandu Ltd. & Lumbini Bank Ltd. Merger Bank of Kathmandu Limited
2 Century Commercial Bank Limited & Alpine Development Bank Limited Acquisition Century Commercial Bank Limited
3 Century Commercial Bank Limited & Sagarmatha Finance Limited Acquisition Century Commercial Bank Limited
4 Century Commercial Bank Limited & Seti Finance Limited Acquisition Century Commercial Bank Limited
5 Century Commercial Bank Limited, Innovative Development Bank Limited & Araniko Development Bank Limited Acquisition Century Commercial Bank Limited
6 Citizens Bank International Limited & Nepal Housing and Merchant Finance Limited & Peoples Finance Limited Acquisition Citizens Bank International Limited
7 Citizens Bank International Limited & Premier Finance Limited Acquisition Citizens Bank International Limited
8 Citizens Bank International Limited and Sahayogi Vikas Bank Limited Acquisition Citizens Bank International Limited
9 Citizens Bank International Limited and Srijana Finance Limited Acquisition Citizens Bank International Limited
10 Citizens Bank International Limited and Tinau Mission Development Bank Limited Acquisition Citizens Bank International Limited
11 Civil Bank Limited & Axis Development limited & Civil Merchant Bitiya Sanstha Limited Acquisition Civil Bank Limited
12 Civil Bank Limited & Hama Merchant and Finance Limited Acquisition Civil Bank Limited
13 Civil Bank Limited & International Leasing & Finance Company Limited Acquisition Civil Bank Limited
14 Civil Bank Limited & Unique Finance Limited Acquisition Civil Bank Limited
15 Global Bank Limited & IME Finance Limited & Lord Buddha Finance Ltd. Merger Global IME Bank Limited
16 Global IME Bank Limited & Commerz & Trust Bank Limited Acquisition Global IME Bank Limited
17 Global IME Bank Limited & Social Development Limited & Gulmi Bikash Bank Limited Merger Global IME Bank Limited
18 Global IME Bank Limited and Bank of Kathmandu Limited Merger Global IME Bank Limited
19 Global IME Bank Limited and Hathway Finance Limited Acquisition Global IME Bank Limited
20 Global IME Bank Limited and Janata Bank Nepal Limited Merger Global IME Bank Limited
21 Global IME Bank Limited and Reliable Development Bank Limited Acquisition Global IME Bank Limited
22 Global IME Bank Ltd. & Pacific Development Bank Ltd. Acquisition Global IME Bank Limited
23 Grand Bank Nepal Limited and Nepal Development Bank Limited Merger Prabhu Bank Limited
24 Himalayan Bank Limited and Civil Bank Limited Acquisition Himalayan Bank Limited
25 Janata Bank Nepal Limited and Triveni Bikas Bank Limited Merger Janata Bank Nepal Limited
26 Janata Bank Nepal Ltd. & Siddhartha Development Bank Ltd. Acquisition Janata Bank Nepal Limited
27 Kist Bank Ltd. & Prabhu Bikash Bank Ltd.& Gaurishankar Development Ltd.& Zenith Finance Ltd. Acquisition Prabhu Bank Limited
28 Kumari Bank Limited and Deva Bikas Bank Limited Acquisition Kumari Bank Limited
29 Kumari Bank Limited, Kasthamandap Development Bank Limited, Mahakali Bikash Bank Limited, Kakrebihar Bikash Bank Limited & Paschimanchal Finance Limited Acquisition Kumari Bank Limited
30 Laxmi Bank Limited & Hisef Finance Limited Merger Laxmi Bank Limited
31 Laxmi Bank Limited and Sunrise Bank Limited Merger Laxmi Sunrise Bank Limited
32 Laxmi Bank Ltd. & Professional Diyalo Development Bank Ltd. Acquisition Laxmi Bank Limited
33 Lumbini Bank Limited & Navadurga Finance Company Limited Merger Lumbini Bank Limited
34 Macchapuchhre Bank Limited & Standard Finance Limited Merger Machhapuchchhre Bank Limited
35 Mega Bank Nepal Limited and Gandaki Bikas Bank Limited Acquisition Mega Bank Nepal Limited
36 Mega Bank Nepal Ltd. & Paschimanchal Development Ltd. Merger Mega Bank Nepal Limited
37 Mega Bank Nepal Ltd. & Tourism Development Bank Ltd. Acquisition Mega Bank Nepal Limited
38 Nabil Bank Limited and Nepal Bangladesh Bank Limited. Acquisition Nabil Bank Limited
39 Nabil Bank Limited and United Finance Limited. Acquisition Nabil Bank Limited
40 NCC Bank Ltd. & Infrastructure Development Bank Ltd. & Apex Development Bank Ltd. & Supreme Development Bank Ltd. & International Development Bank Ltd. Merger Nepal Credit and Commerce Bank Limited
41 Nepal Bangladesh Bank Limited & Nepal Bangladesh Finance limited Merger Nepal Bangladesh Bank Limited
42 Nepal Bangladesh Bank Limited & Nepal Srilanka Merchant Finance Limited Merger Nepal Bangladesh Bank Limited
43 Nepal Credit and Commerce Bank Limited (NCCB) and Kumari Bank Limited (KBL) Merger Kumari Bank Limited
44 Nepal Investment Bank Limited and City Express Finance Limited Acquisition Nepal Investment Bank Limited
45 Nepal Investment Bank Limited and Mega Bank Nepal Limited Merger Nepal Investment Mega Bank Limited
46 Nepal Investment Bank Limited and Jebil’s Finance Limited Acquisition Nepal Investment Bank Limited
47 Nepal Investment Bank Ltd. & Ace Development Bank Ltd. Acquisition Nepal Investment Bank Limited
48 NIC Bank Limited & Bank of Asia Nepal Limited Acquisition NIC Asia Bank Limited
49 NMB Bank Limited and Kanchan Development Bank Limited Acquisition NMB Bank Limited
50 NMB Bank Limited and Om Development Bank Limited Merger NMB Bank Limited
51 NMB Bank Ltd. & Pathibhara Bikas Bank Ltd. & Bhrikuti Bikas Bank Ltd. &Clean Energy Development Ltd. & Prudential Finance Co Ltd. Merger NMB Bank Limited
52 Prabhu Bank Limited and Century Commercial Bank Limited Acquisition Prabhu Bank Limited
53 Prabhu Bank Ltd.& Grand Bank Nepal Ltd. Merger Prabhu Bank Limited
54 Prabhu Finance Limited & Sambridhi Bikash Bank Limited & Baibhav Finance Limited Acquisition Prabhu Bank Limited
55 Prime Commercial Bank Limited and Kailash Bikas Bank Limited Acquisition Prime Commercial Bank Limited
56 Prime Commercial Bank Limited and Kankai Bikas Bank Limited Acquisition Prime Commercial Bank Limited
57 Prime Commercial Bank Ltd. & Biratlaxmi Bikash Bank Ltd. & Country Development Bank Ltd. Acquisition Prime Commercial Bank Limited
58 Rastriya Banijya Bank Limited and NIDC Development Bank Limited Merger Rastriya Banijya Bank Limited
59 Sanima Bank Ltd. & Bagmati Development Bank Ltd. Acquisition Sanima Bank Limited
60 Siddhartha Bank Limited & Business Universal Development Limited Merger Siddhartha Bank Limited
61 Sunrise Bank Ltd. & Narayani National Finance Ltd. Acquisition Sunrise Bank Limited
62 Sunrise Bank Ltd. & NIDC Capital Market Ltd. Acquisition Sunrise Bank Limited

Impact on the Banking Industry

These M&A have made a big difference in Nepal’s banking industry. They have created bigger and better banks that can do more things for their customers and help Nepal’s economy grow.

Some of the benefits of these M&A are:

Diverse Transactions: The transactions include both mergers and acquisitions. Mergers involve two banks combining to form a new entity, while acquisitions involve one bank taking over another. This diversity in transaction types signifies the various strategies adopted by banks in Nepal.

Expansion Strategies: Many commercial banks, such as Century Commercial Bank Limited, Citizens Bank International Limited, and Global IME Bank Limited, have actively pursued acquisition strategies to expand their operations and customer base.

Creation of Larger Banks: Some mergers have resulted in the creation of larger banks, as seen in the case of Global IME Bank Limited, Laxmi Sunrise Bank Limited, and Nepal Investment Mega Bank Limited. These mergers aim to enhance competitiveness and offer a broader range of services.

Market Consolidation: The merger and acquisition activities have contributed to market consolidation by reducing the number of independent banks and creating stronger, more diversified financial institutions.

Survival and Growth: In a competitive banking landscape, mergers and acquisitions can be a survival strategy for smaller banks. It allows them to benefit from the resources and expertise of larger institutions.

Regulatory Environment: These transactions occurred within the regulatory framework set by the central bank and government authorities, highlighting the importance of regulatory oversight in ensuring the stability of the banking sector.

Rebranding: The new names of banks after the merger or acquisition, emphasizing the importance of branding and corporate identity in the banking sector.

The Independent Banks

Not all banks in Nepal have done M&A with other banks. Some banks have decided to stay independent and not join or take over other banks.

These banks have chosen to keep their own identity and position in the market. They think that they can do well on their own without doing M&A with other banks.

They have different reasons for staying independent, such as:

Loyal Customers: Some banks have loyal customers who trust them and like their services. They do not want to lose their customers by changing their name or service quality.

Unique Services: Some banks have unique services that make them different from other banks. They do not want to lose their uniqueness by joining or taking over other banks.

Strong Performance: Some banks have strong performance that makes them confident in their abilities. They do not need to join or take over other banks to improve their performance.

  1. Agricultural Development Bank Ltd

  2. Everest Bank Ltd

  3. Nepal Bank Ltd

  4. Nepal SBI Bank Ltd

  5. Standard Chartered Bank

The story of M&A in Nepal’s banking industry shows how banks can change and grow. Some banks have chosen to join or take over other banks to become bigger and better. Other banks have chosen to stay independent and keep their own identity and position. Both choices have their advantages and disadvantages, but they all aim to serve their customers and help Nepal’s economy.


Spread the love