Padma Bank, grappling with the weight of non-performing loans over the years, is set to merge with EXIM Bank, marking the first-ever bank merger in Bangladesh.
Nazrul Islam Mazumder, Chairman of EXIM Bank, reportedly confirmed the acquisition of Padma Bank after a board meeting today.
A senior official from Padma Bank disclosed that EXIM Bank`s board had already made the decision during a prior meeting.
The formalization of the merger will commence with the signing of a memorandum of understanding (MoU) scheduled for next Monday at the central bank headquarters in attendance of Bangladesh Bank Governor Abdur Rouf Talukder.
Padma Bank, initially established as Farmers Bank in 2013 alongside eight other new banks, encountered significant challenges merely three years after its emergence. In 2017, a substantial restructuring occurred in its ownership and management to avert a complete collapse, leading to the resignation of Muhiuddin Khan Alamgir, a former presidium member of the Awami League, from the chairman`s position.
The government intervened to salvage Farmers Bank from its financial woes, offering a financial lifeline. However, despite rebranding as Padma Bank in 2019, it continued to grapple with a considerable amount of bad loans.
Earlier in January, Chowdhury Nafeez Sarafat stepped down as the chairman of Padma Bank amidst rumors of an impending merger.
Apart from Padma Bank, other distressed banks like City and Eastern Bank are also slated for mergers with stable counterparts, according to the managing director of a private bank.
ICB Islamic Bank, Commerce Bank, AB Bank, BASIC Bank, National Bank, Janata Bank, and Krishi Bank are among the financially fragile banks in Bangladesh currently facing challenges.
