LAGOS—Intercontinental Bank, Gateway Bank, Equity Bank and Global Bank have resolved to come together as one entity to meet the new CBN N25 billion capital base. The Board of Intercontinental Bank has, therefore, resolved to collapse the group structure into a single entity. Also, the Board of Directors of Platinum Bank is raising additional capital by rights issue to move the shareholders funds from N3.2 billion to over N10 billion.
Sources said the bank might also consider merger options with a bank that shares its values, and may have, in addition, recommenced negotiations with credible foreign investors, with whom it has a subsisting three-year agreement in principle to invest in the bank with the aim of meeting the N25 billion minimum capital as stipulated by CBN.
Intercontinental Bank in a statement by Mr. Emeka Aneto, Head, Corporate Affairs, said the Board had approved a consolidation strategy to enable the banks meet the CBN new capital base.
According to him, “the group is made up of the Intercontinental Bank Plc and its subsidiaries and associated institutions which include Equity Bank (Nigeria) Limited, Gateway Bank Plc and Global Bank Plc. By this decision, the Intercontinental Bank’s consolidated group shareholders’ funds is estimated at about N20 billion in the first half of 2004, making it the third largest in the Nigerian banking industry as at that date.
With N20 billion of the group, the bank is five billion naira short of meeting the new stipulated minimum capital. The group, Mr. Aneto said, had indicated that it has at least two options that would push its capital base above the N25 billion mark, well ahead of the 2005 deadline.
One of the options which appears already guaranteed to the group consolidation plan is the capitalisation of profit as the consolidated profit of the members of the group was over N6.4 billion in 2003 while 2004 profit is expected to hit N10 billion.
However, the group may aim at substantially surpassing the minimum capital base by resorting to a post-consolidation Initial Public Offer (IPO).
Intercontinental Bank commenced business in 1989 as a merchant bank where it gained market rating as the most profitable investment bank after five years of operation. With this pedigree and coupled with the circumstance where the playing field was competitively in favour of commercial banking as against merchant banking, Intercontinental Bank acquired Equity Bank, a commercial bank in 1996. Way back in 1993, Intercontinental had in conjunction with other banks floated Associated Discount House Limited (ADHL)where it holds highest shares and in the year 2000 through the ADHL it acquired the majority shares in Gateway Bank Limited. Thus, for over eight years, Intercontinental Bank has operated a thriving group structure which in addition to the associated banking institutions includes WAPIC insurance Plc, a leading player in the nation’s insurance sector. . Intercontinental Securities Limited and Intercontinental Capital Markets Limited, both leading players in the stock market.
Platinum to raise N10b
However, according to Platinum Bank officials, the bank has a high growth potential as evidenced by its track record. Since commencing operations in 2000, Platinum Bank has distinguished itself as a high performing institution with phenomenal growth in deposits, asset base and profitability. Whereas the average industry growth rate is 30 per cent, the bank is growing at 60 per cent annually.
The bank is one of the fastest growing banks in the country and also comfortably among the top 25 banks. Platinum Bank is ranked among the leading players on the weekly Dutch Auction System (DAS) for Foreign Exchange bidding, an indication of the quality of its customer base.
