FNB, Standard cast eyes over Nigerian banks
13 September 2010
Two of SA's big four banks, Standard Bank and FirstRand, may be set to acquire some of Nigeria's rescued banks.
This is after Central Bank of Nigeria governor Lamido Sanusi announced that four of the eight bailed out in the wake of the financial crisis would be handed over to new investors this month.
Last year, the Central Bank of Nigeria bailed out eight lenders and fired some of the chief executives of the banks over a mounting debt crisis in the industry.
Standard Bank, Africa's largest bank, and FirstRand, which owns First National Bank, have expressed interest in acquiring some of the banks. Earlier this week, Standard Bank Group CEO Jacko Maree lamented that the longer the Central Bank of Nigeria and shareholders of the eight banks took to sell the banks, the less attractive they became.
The Central Bank of Nigeria had suggested before that the banks would be sold by the end of the month but this has not happened, partly as a result of delays in the establishment of the Asset Management Corporation of Nigeria, which was to buy the toxic assets of the troubled banks, thereby improving their sale value.
Dianna Games, the honorary CEO of the South Africa-Nigeria Chamber of Commerce, said the delays were affecting the performance of the Nigerian Stock Exchange (NSE), which is dominated by banking stocks. "Problems at the NSE, and the possibility that due diligence of the ailing banks may show a worse situation than originally thought, may have eroded investor confidence," Games said.
Neither bank would indicate which of the institutions it was interested in, saying that the process was confidential.
While Absa has not formally registered interest in buying any of the troubled banks, it has said it sees Nigeria as a good region for expansion outside SA. It has established operations in Tanzania and Mozambique.
Earlier this year its bid to acquire a majority stake in Namibian financial services firm Capricorn Investment Holdings was turned down by the country's regulators. The group's deputy CEO, Louis von Zeuner, said it did not register for the purchasing of the distressed Nigerian banks as this would have been a timely and lengthy exercise. He pointed out that Absa had a presence in Nigeria through parent company Barclays, and that Absa's representative office in Nigeria was due to open its doors next month.
Nedbank might not entertain this opportunity as it is a takeover target itself. The bank already had a footprint across 33 African countries through the EcoBank/Nedbank alliance.
Both Standard Bank and FNB's potential acquisitions might be FinBank, Bank PHB, Oceanic Bank or Intercontinental Bank. These are the banks that held various meetings with minority shareholders over recapitalisation of their banks.
Other banks that were rescued last year include Union Bank, which is one of the country's oldest lenders; AfriBank; Equitorial Trust Bank and Spring Bank.
Standard, which has representation in 17 countries through the Africa, already has a presence in Nigeria through Stanbic IBTC.
FirstRand has representative offices in Nigeria and Angola
