Kumari Bank's capital, which started with Rs 35 crore, now exceeds Rs 26 billion; how was it possible?
Kumari Bank, which began with a paid-up capital of Rs 35 crore in 2057 BS, has increased its capital to over Rs 26.22 billion through IPO, bonus shares, acquisitions, and a big merger with NCC Bank. This growth is a result of Nepal Rastra Bank's minimum paid-up capital policy and the bank's strategic expansion.
Kathmandu. Kumari Bank, established in 2057 BS with the objective of providing banking services, has elevated its capital base to a historic height. Starting operations with a paid-up capital of Rs 35 crore in fiscal year 2057/58, the bank has now succeeded in building a capital structure exceeding Rs 26.22 billion.
Remaining limited to Rs 35 crore for the first three fiscal years, the bank, in the process of expanding share ownership to the general public, issued an Initial Public Offering (IPO) of Rs 15 crore in fiscal year 2060/61, raising its capital to Rs 50 crore. After the IPO, the bank advanced its journey of distributing returns to its shareholders.
Distributing 20% bonus shares consecutively in fiscal years 2062/63 and 2063/64, the bank raised its paid-up capital to Rs 75 crore and Rs 90 crore respectively, and crossed the milestone of Rs 1 billion in fiscal year 2064/65.
In fiscal year 2066/67, Kumari Bank maintained a capital of Rs 1.30 billion, in 2067/68 Rs 1.60 billion, and by distributing up to 33% bonus shares in 2070/71, it maintained a capital of Rs 2.43 billion.
After Nepal Rastra Bank adopted a policy to raise the minimum paid-up capital of commercial banks to Rs 8 billion, Kumari Bank chose an aggressive and strong path of institutional acquisition along with bonus share distribution from internal profits. In fiscal year 2073/74, adding more than Rs 1.35 billion through the acquisition process, the bank's capital exceeded Rs 5.96 billion, and in 2074/75 it reached Rs 7.16 billion.
In fiscal year 2075/76, distributing 21.25% bonus shares and easily surpassing the Rs 8 billion threshold of Nepal Rastra Bank, Kumari Bank reached a capital of Rs 8.68 billion. In fiscal year 2076/77, through bonus and an additional Rs 2.96 billion acquisition process, it increased its size to Rs 12.52 billion. In subsequent years, the bank continued to provide regular bonus shares, reaching a paid-up capital of Rs 14.71 billion by fiscal year 2078/79.
The largest and most decisive turning point in Kumari Bank's financial history came in fiscal year 2079/80, when the bank completed a historic big merger with Nepal Credit and Commerce (NCC) Bank. After more than Rs 11.51 billion in capital was added through that successful merger, the bank's paid-up capital surged to Rs 26,22,58,61,340.