Merger and acquisition of BFIs in Nepal

1,115 views
901 views

Published on

Analyze the merger and acquisition

Published in: Economy & Finance, Business
0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,115
On SlideShare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
0
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide

Merger and acquisition of BFIs in Nepal

  1. 1. Merger and Acquisitionsin BFI’s in NepalGroup BMonika Maheshwari(12319)Ujjwal Chand(12310)Dichhya Amatya (12302)Bishal Tamrakar(12333)
  2. 2. Background M & A is one form of survival strategy 1+1=3 Difficult, challenging, and chaotic Nepal: increase in the number of banks andfinancial institutions Hence requirement of mergers
  3. 3. TypesMergerHorizontal Vertical ConglomerateProduct ExtensionMergersGeographicMarket ExtensionPureConglomeratesMergers
  4. 4. Definitions Merger: The combining of two or morecompanies, generally by offering the stockholders ofone company securities in the acquiring company inexchange for the surrender of their stock Acquisition: When one company acquires anothercompany, may be either friendly acquisition orunfriendly acquisition
  5. 5.  To maximize Shareholder’ wealth To achieve acquisition of the most effectivetechnology To increase market share To Gain Cost EfficiencyReason for Merger and Acquisition
  6. 6. Benefits of Merger and Acquisition Synergistic Effect Greater Value Generation Cost and Revenue Benefits Accessing Technology and Skills Market dominance and growth opportunities
  7. 7.  Financial Stability Survival and sustainability Increase in paid up capital Survive the Competition Strengthen the banking sectorIn Nepalese Context
  8. 8. Merger Article 68 of BAFIA (2063), “A licensed institutionmay, by fulfilling the procedures refer to in this Act,be merged with another licensed institution inaccordance with the laws in force.” Acquisition not defined in Nepalese law”
  9. 9.  Chapter 1: Preliminary Section 1: Title and Commencement Section 2: Definition Chapter 2: Objectives, Capabilities andCommencement Application Section 3: Objectives Section 4: Capability Section 5: Application for Commencement Section 6: Agreement on PrincipleProcess of Merger of BFI’s in Nepal
  10. 10.  Chapter 3: Assets and Liabilities, Cooperationand Final Consent Section 7: Valuation of Assets and Liabilities Section 8: Mutual Agreement Section 9: Final Approval in Merger Section 10: Subsequent to the ApprovalCont…
  11. 11.  Chapter 4: Concessions Section 11: Concession Received when merged Chapter 5: Miscellaneous Section 12: Directives to Merge Section 13: OthersCont…
  12. 12. NepalSriLankaMerchantBankandNBBank–2067BSNRBintroducesMergerBylawsin2068BSHimchuliBikasBank&BirgunjFinanceKasthamandapDevBank&ShikharFinanceBusinessDevBank&UniversalFinanceMachhapuchchhreBank&StandardFinanceGlobalBank&IMEFinancialInstitution&LordBuddhaFinanceInfrastructureDevBank&SwastikFinanceAnnapurnaFinance&SuryadarshanFinancePashupatiDevBank&UdyamDevBankBFIsthathaveReceivedFinalApprovalFromNRBAlpicEverestFinance&ButwalFinance&CMBFinanceViborDevBank&BhajuratnaFinancePremierFinance&ImperialFinanceLoIReceivedAranikoDevBank&SuryaDevBankBFI Merger History in Nepalinance and Laxmi Bank – 2061 BSadesh Bank and NB Finance – 2065 BSnance and National Finance – 2066 BSa Merchant Bank and NB Bank – 2067 BSduces Merger Bylaws in 2068 BSHimchuli Bikas Bank & Birgunj Financeasthamandap Dev Bank & Shikhar FinanceBusiness Dev Bank & Universal Financeachhapuchchhre Bank & Standard Finance& IME Financial Institution & Lord Buddha Financefrastructure Dev Bank & Swastik Financenapurna Finance & Suryadarshan FinancePashupati Dev Bank & Udyam Dev Bankerest Finance & Butwal Finance & CMB FinanceVibor Dev Bank & Bhajuratna FinancePremier Finance & Imperial FinanceHISEF Finance and Laxmi Bank – 2061 BSNepal Bangladesh Bank and NB Finance – 2065 BSNarayani Finance and National Finance – 2066 BSNepal Sri Lanka Merchant Bank and NB Bank – 2067 BSNRB introduces Merger Bylaws in 2068 BSHimchuli Bikas Bank & Birgunj FinanceKasthamandap Dev Bank & Shikhar FinanceBusiness Dev Bank & Universal FinanceMachhapuchchhre Bank & Standard FinanceGlobal Bank & IME Financial Institution & Lord Buddha FinanceInfrastructure Dev Bank & Swastik FinanceAnnapurna Finance & Suryadarshan FinancePashupati Dev Bank & Udyam Dev BankBFIs thathaveReceivedFinalApprovalFrom NRBAlpic Everest Finance & Butwal Finance & CMB FinanceVibor Dev Bank & Bhajuratna FinancePremier Finance & Imperial FinanceLoIReceivedHISEF Finance and Laxmi Bank – 2061 BSpal Bangladesh Bank and NB Finance – 2065 BSrayani Finance and National Finance – 2066 BSSri Lanka Merchant Bank and NB Bank – 2067 BSRB introduces Merger Bylaws in 2068 BSHimchuli Bikas Bank & Birgunj FinanceKasthamandap Dev Bank & Shikhar FinanceBusiness Dev Bank & Universal FinanceMachhapuchchhre Bank & Standard Financeobal Bank & IME Financial Institution & Lord Buddha FinanceInfrastructure Dev Bank & Swastik FinanceAnnapurna Finance & Suryadarshan FinancePashupati Dev Bank & Udyam Dev BankAlpic Everest Finance & Butwal Finance & CMB FinanceVibor Dev Bank & Bhajuratna FinancePremier Finance & Imperial FinanceHISEF Finance and Laxmi Bank – 2061 BSNepal Bangladesh Bank and NB Finance – 2065 BSNarayani Finance and National Finance – 2066 BSNepal Sri Lanka Merchant Bank and NB Bank – 2067 BSNRB introduces Merger Bylaws in 2068 BSHimchuli Bikas Bank & Birgunj FinanceKasthamandap Dev Bank & Shikhar FinanceBusiness Dev Bank & Universal FinanceMachhapuchchhre Bank & Standard FinanceGlobal Bank & IME Financial Institution & Lord Buddha FinanceInfrastructure Dev Bank & Swastik FinanceAnnapurna Finance & Suryadarshan FinancePashupati Dev Bank & Udyam Dev BankBFIs thathaveReceivedFinalApprovalFrom NRBAlpic Everest Finance & Butwal Finance & CMB FinanceVibor Dev Bank & Bhajuratna FinancePremier Finance & Imperial FinanceLoIReceivedAs of July 18, 2012
  13. 13. Merger of Machhapuchchhre Bank andStandard Finance
  14. 14. MBL and SFL Merger Details Capital Structure: New paid-up capital of Rs 2.47 billion and reserves of Rs 240 million Combined deposit of Rs 20 billion and credit of Rs 16.3 billion Market Penetration: Number of branches of new entity is 54 with 63 ATMs MBL had 39 branches and 62 ATMs before the merger Employee Merger: The new entity to have a total of 600 employees All the 120 employees of SFL to be retained Board of Directors formation: Of the 9 directors, 5 from MBL, 3 from SFL and 1 expert member. Share listing: After the merger, 24 million units of shares to be listed @ Rs 100 pershare
  15. 15. Advantage and Disadvantage
  16. 16. Conclusion
  17. 17. Recommendations
  18. 18. References http://laxmi.laxmibank.com/Aboutus.aspx http://www.gorkhapatra.org.np/gopa.detail.php?article_id=32431&cat_id=29 http://www.ekantipur.com/the-kathmandu-post/2011/05/12/money/nrb-unveils-merger-bylaws/221654.html http://www.thehimalayantimes.com/fullNews.php?headline=Market+propels+financial+institutions%27+merger++&NewsID=338897&fb_source=message
  19. 19. Thank You!!!

×