Padma Bank agrees to merge with EXIM Bank: Official

Desk Report

Publisted at 3:44 PM, Thu Mar 14th, 2024

Padma Bank, which has grappled with the weight of non-performing loans for several years, is poised to merge with EXIM Bank, marking the inaugural bank merger in Bangladesh.

The decision for the merger was unanimously reached during a meeting of EXIM Bank's Board of Directors held on Thursday (14 March), reports Prothom Alo.

The formalisation of this decision will commence with the signing of a memorandum of understanding early next week at the central bank headquarters, in the presence of Bangladesh Bank Governor Abdur Rouf Talukder, to kickstart the merger process.

Initially established as Farmers Bank in 2013, Padma Bank faced existential challenges a mere three years into its inception. In 2017, significant restructuring of ownership and management took place to avert complete collapse, including the resignation of Muhiuddin Khan Alamgir, a former presidium member of the Awami League, from the chairman position.

To rescue Farmers Bank from financial turmoil, the government extended a financial lifeline. However, despite rebranding as Padma Bank in 2019, it continued to grapple with a staggering amount of non-performing loans.

In January, Chowdhury Nafeez Sarafat stepped down as chairman of Padma Bank amidst speculation surrounding a potential merger plan.

In addition to Padma Bank, other financially distressed banks are slated for mergers with stable counterparts, such as City and Eastern Bank, as indicated by the managing director of a private bank.

Weak banks in Bangladesh, including ICB Islamic Bank, Commerce Bank, AB Bank, BASIC Bank, National Bank, Janata Bank, and Krishi Bank, are among those likely to be consolidated.

Tags: