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Afribank & Co: AMCON acquires Bridge Banks, injects N679bn

Category: Regulators

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Afribank & Co: AMCON acquires Bridge Banks, injects N679bn



August 7, 2011   
*To announce management soon
*Assure customers of their funds
The Asset Management Company of Nigeria (AMCON), last Friday, acquired from the Nigeria Deposit Insurance Corporation (NDIC) three Bridge Banks to assume the assets of former Afribank, Bank PHB and Spring Bank.
Consequently, AMCON will inject N679 billion into the Bridge Banks namely, Main Street Bank, Keystone Bank and Enterprise Bank, to meet the minimum capital base of N25 billion and the minimum capital adequacy ratio of 15 per cent.
MainStreet Bank, which assumed the assets of Afribank, is to receive N285 billion, Keystone Bank, which assumed the assets of Bank PHB, will receive N283 billion and Enterprise Bank, which assumed the assets of Spring Bank, will receive N111 billion.
Managing Director/Chief Executive of NDIC, Alhaji Umar Ibrahim, and Managing Director/Chief Executive of AMCON, Mr. Mustapha Chike-Obi, disclosed this at a press conference after the signing of agreement transferring ownership of the banks to AMCON.
Mustapha said that the N679 billion would be injected into the banks through bond issuance which would be completed by Monday (tomorrow) morning. He said that AMCON would also soon announce the board and management of the three banks.
Meanwhile, Deputy Governor, Financial Sector Surveillance, Central Bank of Nigeria (CBN), Dr Kingsley Moghalu, said that the three bridge banks were given national and commercial banking licences and that they would be subjected to the same regulations as other banks without any special treatment.
Announcing the transfer of ownership of the three banks to AMCON, NDIC boss, Ibrahim said, “Following the announcement, yesterday, August 5, 2011, of the establishment of three bridge banks, namely Main Street Bank Limited, Enterprise Bank Limited and Keystone Bank Limited, the Nigeria Deposit Insurance Corporation and the Asset Management Company of Nigeria, after intensive negotiations through the night, are pleased to announced that they have signed an agreement today, August 6, for AMCON to acquire the three bridge banks.
“The acquisition and transfer of ownership has been effected through a subscription agreement with each of the three banks. By the subscription agreement, AMCON will become the owners of the three banks, and will provide sufficient capital to restore the banks to the level of capital adequacy stipulated for their operations.
“With the successful sale of the three Bridge Banks, the NDIC has fulfilled its primary objectives of ensuring the depositors in the banks do not lose their funds, in line with the avowed commitment of the federal government, and Mr. President in particular, that Nigerian depositors do not suffer the trauma and suffering associated with bank failure.
“ The capital provided by AMCON through share subscription will strengthen the banks’ liquidity to enable them carry on business and meet all their obligations as they fall due. Consequently the banks are in a position to repay loans obtained from the Central Bank of Nigeria. The liquidity position of the banks are further enhanced by the willingness of the CBN to extend the guarantee of their interbank obligations until December 31st 2011.
“AMCON has identified independent and credible persons with significant and required experience to fill the board and senior management positions for the banks and will be seeking the approval of the CBN for their appointments. AMCON is confident that the new teams will manage the banks to establish strong market positions and effectively compete in the Nigerian banking sector, providing quality service to their customers and value to shareholders.”
Meanwhile, one of the bridge banks, Keystone Bank Limited, has assured customers of their funds.
 In a text message to customers, it said, “Dear customer, effective 05/08/2011, BankPHB Plc becomes Keystone Bank Ltd (KBL).KBL will continue the operations of the Bank. Customers deposits remain safe and protected, CBN guarantees intact and extended. All staff jobs are secure as well. Be assured of continued excellent services. Keystone Bank Ltd”.

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