The on-going consolidation in the banking industry is set to record another major acquisition as indications emerged over the weekend that Oceanic Bank International Plc has stepped up discussions with Standard Bank of South Africa to acquire its Nigerian subsidiary, Stanbic Bank Nigeria Limited.
Oceanic Bank, confirmed sources reveals, has finalized discussions to take over another Nigerian Bank ÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€¦Ã¢â‚¬Å“ International Trust Bank (ITB).
Standard Bank ÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€¦Ã¢â‚¬Å“ the parent company of Stanbic Bank Nigeria, THISDAY gathered, is also expected to invest a minority shareholding stake in Oceanic Bank. The union, when successfully concluded, is expected to shore up Oceanic BankÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¾Ãƒâ€šÃ‚Â¢s standing among the mega banks in Nigeria.
Oceanic BankÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¾Ãƒâ€šÃ‚Â¢s attraction to ITB, according to information, was informed by its extensive branch network in the Northern part of Nigeria, while Stanbic Bank is said to be strategic for its outstanding African and Global franchise through its parent company Standard Bank of South Africa and here in Nigeria where it has already established unparalleled core competences in custodian, corporate and investment banking.
It had exclusively reported couple of months ago that Standard Bank may have decided to pull out of the country following its failed attempts to acquire United Bank of Nigeria Plc and Afribank of Nigeria Plc.
In the wake of the on going banking consolidation, which requires every bank in the country to either beef up its capital to N25 billion or merge with other bank or banks to meet the prescribed capital before December 2005, South AfricaÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¾Ãƒâ€šÃ‚Â¢s Standard Bank (operating in Nigeria as Stanbic Bank), was said to have decided that there was no business sense in injecting $250 million into Nigeria through Stanbic because it did not match its business strategy.
Given this scenario, Standard Bank had expressed interest in buying over UBA and Afribank, a move which met a brick wall as the regulatory authorities were said to have insisted that none of the big banks in the country would be sold to a foreign bank.
After the move to acquire these two big banks failed, Standard Bank was said to have decided to pull out by selling about 90 per cent of its stake in Stanbic Bank, retaining only 10 per cent.
The rationale for retaining 10 per cent of its stake, was to pave way for the bankÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¾Ãƒâ€šÃ‚Â¢s easy re-entry into the country anytime it feels that the environment conducive for it.
Meanwhile, with the proposed acquisition of these two banks, it is envisaged that the new Oceanic Bank will produce a mega bank that would be strong in both corporate and retail ends of the market; leveraging on its enhanced international and geographical reach.
As at the end of September 2005, Oceanic Bank has increased its business offices to over 100, which is expected to grow to over 130 business offices nationwide after the proposed acquisition.
Oceanic Bank is among the few banks that have met and surpassed the N25 billion re-capitalization directive of the CBN. Whilst its shareholdersÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¾Ãƒâ€šÃ‚Â¢ funds stood at N26.5 billion after its successful Initial Public Offer (IPO) in October 2004, it is expected that the bank, on its own, will rake in above N30 billion shareholdersÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¾Ãƒâ€šÃ‚Â¢ funds at the end of its September 30, 2005 financial year. This is addition to the two acquisitions, would take Oceanic Banks shareholders fund to about N50 billion., making it the third largest banks in Nigeria after First Bank and Union Bank.
Other acquisitions that have been accomplished in the on-going consolidation include the takeover of Lion Bank by Diamond, purchase of Nigeria-American Merchant Bank Limited (NAMBL) by First City Monument Bank Plc (FCMB) and buying of Manny Bank by Fidelity BankPlc.