Business
First Bank Floats N500b Acquisition Bond
First Bank of Nigeria Plc has planed to use a slated N500 billion ($3.3 billion) bond to fund acquisition both in Nigeria and abroad, according to its chief executive.
The Central Bank of Nigeria said it expects a second round consolidation in the banking industry after the injection of N600 billion ($4 billion) into the sector in August to bail out nine weak banks.
Its Chief Executive, Bisi Onasanya said “if there is any bank in Nigeria that is ready or is adequately prepared for an acquisition, I think there is no other bank than First Bank.
According to him, “We do have plans for an international acquisition, a merger but we also have our own expansion strategy” adding that discussions about an international deal were on-going but declined giving details.
First Bank Shareholders gave approval in August for a bond issuance of up to N500 billion.
He said Nigeria remained the most attractive market in sub-Sharan Africa and that it also intended to continue its domestic consolidation efforts.
The Central Bank injected N400 billion into Afribank, FinBank, Intercontinental Bank, Oceanic Bank and Union Bank on August 14 and sacked top executives after an audit found tax governance had left them so weakly capitalised posing a system risk.
It said on October 2, it was providing a further N200 billion to four more banks – Bank PHB, Equatorial Trust Bank, Spring Bank and Wema Bank – also judged to be facing a grave liquidity risk.
The CBN had said the rescued banks will be run as going concerns until new investors can be found to recapitalise them.
The CBN’s governor Lamido Sanusi said in August his preferred option would be for the rescued banks to be bought by other financial institutions.
It was reported last week that First bank along with Guaranty Trust Bank, United Bank for Africa and Zenith Bank are expected to emerge as clear leaders in the Nigeria banking sector.
The Renaissance capital’s report said it believed the most prized acquisition targets for the top four would include Diamond Bank, Ecobank Nigeria, Fidelity Bank and Skye bank which all passed the CBN’s audit and offered solid niche businesses according to Renaissance.
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