Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: A agreement has been reached between Pakistan’s Habib Bank Limited and National Life Insurance Company for the purchase of Himalayan Bank’s promoter shares, signaling one of the largest ownership reshuffles in Nepal’s banking sector in recent years.
According to the agreement finalized in the last week of July, National Life will purchase 28,012,447 promoter shares held by Habib Bank at a price of Rs 118.88 per share. This offer is higher than the minimum floor price of Rs 112.80 per share announced by Himalayan Bank on June 13 through a 35-day public notice calling for bids.
Currently, National Life holds a 1.25 percent stake in Himalayan Bank. Upon completion of this deal, its ownership will soar to 14 percent, making the insurance company one of the largest domestic institutional shareholders in the bank.
The transaction, however, is subject to approval from Himalayan Bank’s Board of Directors and the Nepal Rastra Bank (NRB). Only after these approvals will the payment and share transfer process formally begin.
Habib Bank’s Third Exit Attempt
This agreement follows two previously failed attempts by Habib Bank to offload its stake.
Four years ago, Habib had reached a deal with Commonwealth Development Corporation (CDC) UK, but the sale was blocked due to opposition from the Himalayan Bank board.
Again in December 2023 (Mangsir 2080), Habib attempted to sell its stake to Himalayan Reinsurance Company at Rs 130 per share, but the proposal was rejected by NRB.
This time, the deal has progressed smoothly as National Life, itself a promoter shareholder, qualifies under Nepal’s Bank and Financial Institution Act (BAFIA), which gives priority rights to existing promoter shareholders when such stakes are up for sale.
Regulatory Approval Key
Under NRB’s unified directives, the transfer of promoter shares requires strict compliance with priority rights. Since National Life already belongs to the promoter group, its proposal effectively sidelined Himalayan Reinsurance’s earlier interest in the shares.
Industry analysts say this acquisition could reshape the balance of influence in Himalayan Bank’s boardroom. With a significant 14 percent stake, National Life will gain a stronger say in strategic decisions, potentially strengthening domestic institutional control over one of Nepal’s oldest commercial banks.
The development also highlights the shifting dynamics in Nepal’s banking sector, where foreign promoters like Habib Bank appear to be reducing their footprint, while domestic institutional investors are stepping up to consolidate their hold.
Next Steps
If the Board and NRB approvals go through, the payment and share transfer will begin immediately, formalizing National Life’s expanded ownership. The deal is expected to close within the next quarter, marking the end of Habib Bank’s long-standing promoter role in Himalayan Bank.
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