Kist Bank & Prabhu Bikas Bank very close to a merger

Kist Bank Nepal and Prabhu Bikas Bank are now very close to a merger. After taking over major shares of Kist, with the help of its former chairperson, the Prabhu Group is now planning to take over the management for a smooth merger.

As part of that plan, they have reshuffled the management of Kist. CEO of Sanima Bank Kumar Lamsal has been hired as the CEO of Kist while CEO of Prabhu Bikas Bank has joined Kist as his deputy.

To further bolster their grip on Kist, two directors from the Prabhu Group, Parmeshwor Pradhan and Pushpa Bahadur Pradhan, have been appointed to Kist’s board of directors.

"This is part of our merger strategy,” a high Prabhu official told ShareSansar.

In December second week, senior officials from both the banks had told that Prabhu was buying both promoter as well as ordinary shares of Kist in an apparent bid to facilitate the merger.

“Kist Bank and Prabhu Bikash Bank are working on a merger,” the source privy of the development had told ShareSansar then. “It might, however, take some time before they sign the deal.”

Company secretary of Prabhu Bikash Bank Amit Bhandari had said that several rounds of talks for merger with Kist was initiated by the then Chairperson of Kist Bank Rajendra Shakya.

He also added that Prabhu has not discontinued the talks for merger and has also been buying shares of Kist “not just for to diversify its investment portfolio but also with an eye for the possible merger”.

Apart from buying Shakya’s stake in Kist, Prabhu has also been vigorously picking Kist Bank’s shares in the market since the resumption of its shares trading since December 9 after a hiatus of nine months.

Trading of the shares of Kist Bank was suspended by the NEPSE after Kist signed a Memorandum of Understanding with Vibor Bikas Bank for the merger of the two BFIs back on March 21.

However, seven months after the MoU, both the BFIs decided to pull out of the merger process due to some internal reasons, particularly the resignation of Kamal Gyawali, the then Managing Director of Kist Bank, owing to some loan scam related to his spouse.-SSN