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September 25, 2011

 

As shareholders of Intercontinental Bank flag off the first of four extraordinary general meetings (EGMs) by rescued bank in Lagos today, to vote for, or against their planned business combinations with rivals, experts have expressed hopes for a positive vote to bring the process to a close.

 

Expectations, according to stakeholders, including directors of the banks are that the shareholders would approve the combinations, thereby salvaging some of their investment, rather than losing all.

 

Shareholders, Sonnie Ayere, chief executive of Dunn Loren Merrifield, an investment banking group, believes, do not really have a choice, given the alternative available.

 

Opeyemi Agbaje, managing director of Resource & Trust Company Limited agrees, noting that “at this point, the shareholders have severely limited options, and may most likely endorse the deals on offer.”

 

Continuing, he expressed hopes that the Sterling/ ETB will succeed being a voluntary transaction, while there are three broad possibilities for the others- “the deals are all approved; the deals all fail or some are approved and some are rejected by shareholders. All things considered, I hope these deals are endorsed so we can return to financial sector stability. I also hope the three bridge banks are sold to private investors within 12-18 months.”

 

The alternative, for the shareholders, going by what the CBN and AMCON have signalled, Agbaje continued, “are more bridge banks.”

 

Should the shareholders approve the recapitalisation, he said, will lead to an imminent further reduction in the number of banks as “Oceanic, Intercontinental, Finbank and ETB (Equitorial Trust Bank) may disappear into ETI (Ecobank Transnational Incorporated), Access, FCMB (First City Monument Bank) and Sterling respectively leaving the industry with 20 banks. Union Bank if its ACA (African Capital Alliance) deal goes through will continue under new leadership.”

 

But David Adonri, CEO, Lambeth Trust & Investment Company also agrees that shareholders beginning with those of Intercontinental will approve its recapitalisation by Access Bank.

 

Other combinations include Oceanic Bank, which is being wooed by Ecobank Transnational Incorporated; Finbank and First City Monument Bank; while Union Bank’s shareholders are required to approve a bid by African Capital Alliance consortium to inject $750 million in Tier 1 and 2 capital.

 

Source: Daily Independent

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