Sunrise Bank plan 11% dividend & merge with H & B Development Bank

Sunrise Commercial Bank Limited has been holding series of discussion with H & B Development Bank for a merger.

“We have hold three rounds of discussion with H & B Development Bank,” head of Share and Legal Department of Sunrise Bank Tika Bhattarai told .

He further said that despite the H & B Development Bank’s Good for Payment (GoP) cheque scandal, its other fundamentals such as deposit and loan situation were in a good shape.

“When H & B approached us with the merger proposal, we carefully studied their status, especially in light of the scandal,” Bhattarai said. “We also discussed it with Nepal Rastra Bank. As the central bank also suggested that the merger process can take place keeping aside the GoP cheque case, we decided to move ahead.”

The swap ratio will only be decided after the due diligence report (DDA) takes place.

The H&B Development Bank scandal took place in December after two fraudsters lured some account holders to transfer the money to their accounts, pledging high interest rates.

Once the amount was transferred, the manager of H & B branch at Kuleshwor, who was an accomplice, then issued GoP cheques to the frauds.

The amount equivalent to that mentioned in the GoP cheque has to be kept aside in the account. But instead of locking the amount, the manager released the money, allowing the fraudsters to flee with crores of rupees.

Following the fraud, H& B Development Bank has reported a loss amounting to Rs 22 crore but it could actually be facing possible losses of up to Rs 1 arba as the case unfolds.

The national-level development bank has a paid-up capital of Rs 89.79 crore while its share price, which stood at Rs 128 just before the scam, took a nosedive following the scandal, and currently stands at Rs 49.

The H & B case is still sub judice.

Though Bhattarai said that Sunrise Bank also held informal discussion with some other BFIs, he added that there was nothing worth mentioning about it.

The last Annual General Meeting of Sunrise Bank has already given the mandate its Board of Directors to carry forward the merger process.

Up to 11% dividend

On a different note, Sunrise Bank official hinted that they could provide up to 11 percent dividend to the shareholders from the net profit they registered in the last fiscal year 2069/70.

“We are waiting for the central bank to return the revised balance sheet,” Bhattarai said. “We will then hold the BoD meeting to decide on the issue of the dividend. Going by our balance sheet, it could be up to 11 percent.”

He, however, said that the BoD will decide whether to give only cash dividend, bonus share or both to the shareholders.

He further informed that they were planning to hold the AGM by Poush end.

-sharesansar