Latest News:
Stock Price:
MARKET WATCH
Oct 1,2014
NEPSE
937.99  -  0.68
CRUDE OIL(/BARREL)
78.69  -  0.38
USD/NPR
99.1  -  0.34
GOLD(NPR / 10g)
44240  -  0
SILVER(NPR / 10g)
639  -  0
Home » News
1/10/2014
|
FINANCIAL NEWS  >>
Vibor, Bhajuratna plan joint operation from mid-July
2012-03-20

Vibor Bikas Bank and Bhajuratna Finance, which last week received the letter of intent (LoI) for merger from the central bank, plan to start joint operation from mid-July.

After the merger, the merged entity (Vibor Bikas Bank) plans to move aggressively in the direction of increasing its capital through further merger and acquisitions.

Vibor Chief Executive Officer (CEO) Ajay Ghimire said they will acquire a small financial institution ‘very soon’. He, however, did not disclose the name of the institution. “In the current scenario, either a small niche player serving limited market or a well-capitalised institution working efficiently on economies of scale can survive,” said Ghimire. “We are going for the second option.”

Currently, both Vibor and Bhajuratna are conducting due diligence audit (DDA), and joint operation will start after the DDA report comes out. After the merger, Vibor plans to increase its paid-up capital to Rs 1.36 billion. At present, Vibor has a paid-up capital of Rs 680 million, while Bhajuratna has Rs 78 million.

Bhajuratna’s main promoter—Jyoti Group and Associates—has pledged to pump in an additional capital of Rs 148 million. Vibor plans to add Rs 208 million from another strategic partner, which, as said by Ghimire, will be an acquired financial institution.

The company will raise Rs 241 million more through further mergers or rights share issuance and will maintain a promoter-public shares ratio of 61:39.

Vibor, after facing an acute liquidity crunch about a year ago, had to be rescued by the Nepal Rastra Bank (NRB) under the lender of last resort measure. Vibor recently sold its some of its property and a few good loans to repay the refinancing amount to the NRB.

Of late, there has been a dramatic improvement in the bank’s financial indicators, according to Ghimire. Although there are concerns about the merger of two weak financial institutions, NRB officials said Vibor has largely recovered from its liquidity crunch.

Deposits of Vibor have gone up to Rs 2.74 billion from Rs 2.54 billion at the end of this fiscal’s second quarter. Its inter-bank borrowing and non-banking assets have also came down sharply. Vibor’s inter-bank loans came down to Rs 350 million from Rs 564 million in mid-January.

“Vibor, after the merger, will exit ‘survival mode’ and will channel its energy again in innovation and growth,” said Ghimire. “The organisation will become stronger through capitalisation and financial backing, so depositors need not worry about safety of their money.”

Bhajuratna Finance Director Roop Jyoti said the bank has full support of the Jyoti Group.

source: The Kathmandu Post, 19 March 2012

     COMMENTS
     Recommendations

COMMENTS

No Posts Yet...

  • FinancialNepal

Post a comment

* marked are required fields

*Name:
*Email Address:
*City:
*Comments
In order to help us prevent automated submissions, please type the number shown in below picture
*Validation no.
captcha

Connect with us
Would you like to advertise here?
Narayanni National Finance Home Loan