Governor Abdur Rauf Taulkder holds a meeting with the chairmen, CEOs and directors of NBL and UCB
Published : 10 Apr 2024, 03:46 AM
Amid a merger spree of banks in Bangladesh, discussions over the marriage of troubled National Bank with another one have begun more than four decades after it burst onto the scene.
Bangladesh Bank has reportedly begun mediation between National Bank Limited or NBL, the first Bangladeshi private bank founded by a set of entirely local sponsor directors in 1983, and United Commercial Bank Limited or UCB, another bank formed the same year.
Governor Abdur Rauf Taulkder held a meeting with the chairmen, CEOs and directors of the two banks on Tuesday.
“The banks are in discussions. They are evaluating the situation. Nothing has been concluded at the moment. Bangladesh Bank will make a formal announcement when everything is finalised,” said central bank spokesman Mezbaul Haque.
After Exim Bank and Padma Bank signed an agreement for a merger last month, the boards of Sonali Bank and Bangladesh Development Bank on Tuesday approved their amalgamation.
And City Bank has shown interest in acquiring BASIC Bank in a proposal backed by the central bank.
NBL Chairman Syed Ferhat Anwar told http://bdnews24.com: “Discussions for the merger with a healthy bank have begun. Talks were held with several banks but the matter has not been finalised yet.”
“Our board discussed a merger with another bank. We sent the proposal to Bangladesh Bank. Now the central bank will decide with whom we can be merged.
“We’re speaking with multiple banks, but have not taken a decision. We’ll go with the bank with whom we will have a good understanding. Nothing is finalised yet. We’ve just begun the process. There is still much to discuss.”
Ferhat was the first from outside the Sikder family to be appointed as chairman in December 2023 in a long time after the Sikder Group took control of the bank in 2009.
When he presented the proposal on a merger amid scams in March, the board of directors was split.
The chairman asked for time to take a final decision as both sides remained adamant, a director said, requesting not to be named. Those opposing a merger also took time to grasp the issue first.
As many as 18 sponsor directors, including AKM Abu Taher, Abu Taher Mia, Zainul Haque Sikder, Khaljilur Rahman and Mozazzem Hossain, launched the bank in 1983.
Through changes brought to the board in 2009, Sikder Group Chairman Zainul took control of the bank. The directors of other families were then dropped from the board one by one and Zainul’s wife and children were made directors.
After Zainul’s death in February 2021, his wife Monowara Sikder became chairman. Hosaf Group Chairman Moazzem and his son Mabroor were removed from the board in August 2022, which established absolute control of the Sikder family over the bank. KDS Group Chairman Khalilur was still a director of the bank.
But Zainul’s children Ron Haque Sikder, Rick Haque Sikder and Parveen Haque Sikder started a dispute over the control of the business empire their father left behind. Monowara appeared to have failed to tackle the crisis, which affected the bank as well.
In this situation, an incident of Tk 1.5 billion money laundering allegedly by NBL directors from the Sikder family through credit cards, and loan scams were unearthed.
As the bank sank deeper into the crisis, the board was reformed over allegations of rules violations, and Ferhat took over as chairman.
Only one member of the Sikder family was kept on the board while Moazzem was brought back.
UCB, established in 1983 like NBL, is doing better than National Bank. Its Chairman Rukhmila Zaman and Managing Director Arif Qadri did not respond to phone calls or text messages for comments on the discussions over a merger with NBL.
With a Tk 2.19 billion paid-up capital, NBL has 221 branches and 60 sub-branches across Bangladesh.
Its accumulated non-performing loans stood at Tk 135.15 billion as of September 2023, or nearly 32 percent of the total loans disbursed by the banks.
The amount of bad loans at UCB is Tk 33.25 billion, or 6.88 percent of the total. The bank with a paid-up capital of Tk 14.76 billion has 228 branches and sub-branches.