NATIONAL7 (Spotlight Weekly)]

Going Public

The one-year-old private sector bank issues largest-ever shares to general public

By A CORRESPONDENT

At a time when the country's capital market was slightly picking up for the last couple of months, there is a good news for all concerned. The Nepal Industrial and Commercial (NIC) Bank Ltd. has announced that it is going to issue 35 percent of its shares to general public beginning December 2.

At a press meet organized here on Friday, chairman of the Bank and a leading industrialist Jagdish Prasad Agrawal said that the Bank is going to open public issue of 1.75 million ordinarys shares of Rs 100 each aggregating Rs 175 million. "This is the largest ever public share issued in the Nepalese capital market so far," said K. R. Iyer, executive director of the Bank. The Bank has appointed NIDC Capital Markets Ltd. and Nepal Merchant Bank and Finance Ltd. as its principal issue managers. Over 40 financial and banking institutions all over the country will provide share forms to the prospective investors.

"The response of the Nepalese investors toward the public issue of banking sector has been very encouraging in the past. It is because almost all the commercial banks are doing well," said Yogendra Prasad Shrestha, Chairman of Nepal Share Market Company Ltd.

Established in 1998, the NIC Bank has registered operating profit of Rs 6.44 million in the very first year of its operations. Sixty percent of the total paid up capital of Rs 325 million is owned by nine leading industrial and business houses of the country whereas 5 percent of the equity is owned by Rastriya Banijya Bank. The Biratnagar-based Bank has its branches in Dharan, Kathmandu and Birtamod. "Our focus will be on mid-size corporates and thrust will be on non-funded business activities," said lyer. Nine leading industrial and business houses own 60 percent of the total paid up capital of Rs. 325 million. Operating profit in the very first year of its operations is a salient strength of the Bank showing its future prospects to be even better, said Bank officials. In the first quarter of the current fiscal year 1999/2000, the Bank has been able to collect 835 million. The Bank has a wide range of clientele and is growing at a fast pace. We are receiving very good response from our customers all over the country, said Bank officials.

With a view to expand its base, the bank has raised its authorized capital to Rs. 1,000 million and paid up capital to Rs 500 million. It has already collected deposits of more than Rs one billion and has already invested up to Rs 950 million to different business and industrial activities. "With fully computerized services and indigenous management, we are free from Year 2000 (Y2K) problem," said Iyer. "Besides delivering personalized services to our customers, we also provide special facilities to importers from India and exporters from Nepal for payments of export bills."

According to Iyer, the bank has hired an Indian consulting company to provide free consultancy services to Nepalese steel industries. "The bank is endeavoring in economic upliftment of the nation by creating and providore than Rs one billion of deposits and its lending has crossed Rs 835 million. Not only the people from eastern sector, the Bank has received tremendous support and confidence of its customers based in different parts of the country, said its officials.

One will have to wait for just one week to see how much Nepalese investors bank on public issue of the NIC Bank, which is run with the motto "Your Expectation, Our Service."