First Bank Lists Criteria for Acquisition
From Kunle Aderinokun in Abuja
First Bank of Nigeria Plc has listed criteria for acquisition of any bank. It also said it was targeting N70 billion capitalization by March 31, 2006.
Making this disclosures yesterday in Abuja at the 35th Annual General Meeting (AGM), Managing Director of the bank, Mr. Jacobs M. Ajekigbe said the bank's doors were open for any bank to come in, but that such banks would have to meet certain criteria set by First Bank.
Although, Ajekigbe did not reveal the criteria, they may not be far from strong asset base, good track record of banking, amongst others.
He said the bank plans to acquire some small banks noting that the board has approved talks with willing and interested banks.
According to him, "We don't want to be caught unaware, we want to be bigger. We are likely to have other banks. If there is any banks that want to join us, they can come in. "
Presently, the bank's shareholders' fund stand at N41.6 billion.
The chief executive who disclosed that one-third of the bank's assets are non-performing said the bank made a debt recovery of N3 billion in the just concluded financial year ending March 31, 2004. He noted that this was made possible by the creation of an active department dedicated specially to debt recovery.
He said a legal process is still on-going as regards the about $100 million loan granted to Investors International (London) Limited (IILL) in the botched bid to acquire NITEL Plc.
He declared that it is only after the bank has recovered the monies taken by IILL that it would do another rights issue.
Also, speaking at the AGM, President, National Shareholders' Solidarity Association (NSSA), Chief Akintunde Asalu advocated the appointment of a director in charge of debt collection in the bank.
"The time has come for us to take debt collection very seriously. We should have a director for debt collection. It is in the recovery of these debt that our profits can improve."
In its own comment, National President, Association for the Advancement of the Rights of Nigerian Shareholders (AARNS), Farouk Umar called on the Federal Government to allow interest rates to be determined by the market forces.
Chairman of First Bank, Dr. Umar Mutallab revealed that the bank's gross balance sheet closed at N312.5 billion as at March 31, 2004 representing a marginal decline of 2.5 per cent from N320.6 billion in the corresponding period of last year.
He attributed "the decline, which is further evidence of our continued restructuring of the bank for economic value," to "the result of the net impact of the shake-up in the balance sheet structure. This according to him, "favoured earning assets over non-earning assets."
He pointed out that, "the bank's asset mix and structure are currently more efficient and profitable than they have been previously." He however, said gross earnings rose marginally from N45.06 billion in the twelve months ending March 2003, to close the review period at N45.12 billion.
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