Proshare - Facebook Proshare - Twitter Proshare - Google+ Proshare - Linked In Proshare - RSS Feed

‘CBN not involved in banks’ mergers, acquisitions’




March 15, 2011 by Ademola Alawiye    
The Central Bank of Nigeria has said that it is not involved in banks’ fresh merger and acquisition plans.
The Head, Corporate Affairs, CBN, Mr. Muhammed Abdullahi, told our correspondent in a telephone interview on Monday that the Deposit Money Banks were handling the merger and acquisition processes.
He said, “The banks are in charge of the whole process of the M and A. The CBN has no hands in it at all. It is not the job of the apex bank to arrange mergers and acquisition among banks. The CBN will not step in the process. When the mergers are through, the banks will announce themselves.”
The CBN spokesman, however, confirmed that mergers talks were going on among the banks, noting that the results would soon be released.
“The banks are meeting and talking, and the results will be announced by the banks as soon as the process is over,” he said.
Some of the healthy banks have been holding talks with the managements of the rescued banks in order to acquire them.
Although none of the banks has announced plans to merge or acquire any of the rescued banks, sources close to the banks have outlined possible merger and acquisition deals in the sector.
Our correspondent gathered that Bank PHB Plc, for instance, might be acquired by HBL Pakistan, which is the largest bank in Pakistan. Also, Capital Alliance Group has been linked with Union Bank of Nigeria, while Access Bank is in talks with Intercontinental Bank Plc.
There are also reports that First Bank of Nigeria Plc may acquire Oceanic Bank International Plc, while Vine Capital Partners is also holding talks with Finbank Plc.
Reuters had also said that Skye Bank was interested in buying one or two rescued banks.
According to the Managing Director, Sotice Investment Company Limited, Mr. Adedayo Toluwase, mergers and acquisitions will have a positive effect on the ability of the banks to carry out their primary functions of financial intermediation.
He added, “Mergers and acquisitions in the banking sector will improve competitiveness and efficiency of the borrowing and lending operations of the Nigerian banking industry.
“However, the CBN should monitor the banks to avoid unnecessary competition that will lead to future problems.”
The CBN rescued nine banks in a N620bn bail-out in 2009 after auditors deemed them to be so weakly capitalised to the extent that they posed a risk to the whole financial system.
It has since sought new investors to recapitalise them. The rescued banks have been holding talks with potential investors in recent months so as to meet the CBN deadline.
Source: Punch
Related News