Nabil Bank Limited has successfully completed the allotment of its 8 Percent Non-Convertible Non-Cumulative Preference Shares, marking a historic step in Nepal’s banking sector. A total of 50 million units were issued, valued at NPR 5 billion, with each share carrying a par value of NPR 100.
Following formal approval from the Securities Board of Nepal, the bank finalized the allotment on Poush 1, 2082. The shares were issued through a private placement (circular method) specifically for institutional investors, ensuring capital is raised from long-term and stable sources.
These non-convertible, non-cumulative preference shares contribute to the bank’s Additional Tier 1 capital, strengthening its core capital base. This enhancement increases the bank’s capacity to absorb potential losses while maintaining lending activities in a high-capital requirement environment.
Nabil Bank is the first commercial bank in Nepal to receive official permission to issue such shares. The shares provide a fixed 8% dividend in years when the bank reports distributable profit and do not accumulate unpaid dividends, distinguishing them from traditional debt or equity instruments.
The investors include insurance companies, provident funds, and other financial institutions. As the shares do not carry voting rights, the existing control structure of the bank remains intact. In the event of dissolution, these shareholders have priority over ordinary shareholders but remain behind depositors and other creditors.
The Securities Board of Nepal closely monitored the issuance to ensure transparency and high standards of corporate governance. This successful allotment sets a precedent for other banks in Nepal and highlights the growing appetite for innovative financial products in the domestic capital market.
Nabil Bank’s strategic move reinforces its financial position, enabling it to support economic growth and deliver value to stakeholders.
