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.
The facility will be disbursed through participating Microfinance Institutions (MFIs), which will in turn extend the loans to their customers, particularly SMEs, as they directly interface with businesses at the grassroots level.
The Executive Director of COMCIN, Mr. Micheal Ogbaa who represented the Chairman, Dr. Iredele Oyedele (FCA, FCCA), said the initiative is designed to strengthen micro-lending institutions and expand access to finance for grassroots entrepreneurs, particularly women and youths in the informal sector.
Ogbaa explained that COMCIN does not lend directly to individuals but works through its network of microfinance and cooperative institutions, which in turn provide loans to end users.
“We came together to advocate for the microfinance ecosystem. Commercial banks often exclude people at the grassroots, but our members are positioned to reach them. This facility will empower them to do more,” he said.
He noted that the loan scheme offers low interest rates and flexible repayment plans, making it more accessible to small business owners.
According to him, about 90 percent of beneficiaries are expected to be women, who play a key role in sustaining families and driving economic activities at the local level.
“Our focus is on traders, service providers, and players in the informal sector. These are the real movers of the economy. By supporting them, we are strengthening families and contributing to national development,” he added.
Ogbaa disclosed that eligible SMEs with proven integrity and business track records could access up to N5 million each through participating micro-lending institutions. The rollout has commenced in Lagos and will extend to Abuja, Enugu, and other regions, including the South-West, South-East, and North-East.
He said 12 micro-lending institutions have already benefited from the scheme, while 85 applications are currently being processed under the pilot phase.
“Our target is to reach at least 100,000 SMEs nationwide. We are building a platform that connects funding partners with credible micro-lending institutions, creating a reliable channel for financial inclusion,” Ogbaa said.
He added that COMCIN is also working to attract larger funding pools from development finance institutions and private investors, noting that successful implementation of the pilot phase would boost confidence and unlock more capital for SMEs.
“We have seen encouraging testimonies from early beneficiaries. As we demonstrate transparency and efficiency, more institutions will be willing to channel funds through us,” he said.
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