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 Daily Independent Online.
* Friday, July 23, 2004.
City Express,
Afribank, UTB, others explain capitalisation plans
By Joseph Sesebo
Group
Business Editor
Banks’ boardrooms
have come alive lately with the recent pronouncement by Professor Charles
Soludo, the new Governor of the Central Bank of Nigeria (CBN), asking
banks to raise their capital base to N25 billion.
The cache is that all
available options such as mergers, acquisitions, initial public offer,
new investors, either locally or internationally, and a host of other
options are being considered. Some others, wary of losing control, are
thinking of beefing up their share capital appreciably to the extent that
they will have controlling stake before inviting others.
Evidently, the most considered
options is that most do not want to lose control and therefore favour
internally sourced resources to meet the requirement.
After examining the available
options, they are unanimously assuring that meeting the new capital base
would not be a major problem afterall. Banks such as Wema Bank, Afribank,
City Express Bank and Universal Trust Bank, among others, favour this
option, saying they will meet the requirement before the expiration of
the deadline.
Universal Trust Bank Plc said
that in response to the new capital requirement, the bank has put in
place adequate measures that would enable it leverage the strength of its
ever supportive shareholders, both existing and prospective, to further
consolidate its banking franchise.
It assured the customers and
shareholders about the safety of their funds and investment, saying the
bank is committed to achieving this goal. “We do this to enable you our
valued customers and shareholders continue to enjoy the benefits of being
associated with us. Universal Trust Bank, as you well know, is a reliable
and respectable member of the Nigerian financial services industry.”
The last five years of the
bank has witnessed phenomenal growth in earnings, pitching at
N7.49billion. Deposit and asset base towed a similar growth trajectory
and peaked at N26 billion and N32 billion respectively for the year ended
March 31, this year.
City Express Bank Plc also
assured its stakeholders and customers that the new capital base will
have no negative impact on the bank's operations.
The bank's board, according to
a statement, further assured the customers that the recent directive that
public funds be withdrawn from banks would not put its liquidity position
in jeopardy, noting that the bank has started generating deposits from
the retail end of the market by expanding its branch network. The release stated further that
the bank is prepared to meet and even surpass whatever capital base the
regulatory authority decides upon after the on-going deliberation with
the CBN and the Federal Government.
"City Express Bank has
demonstrated and maintained a consistent growth over the years that has
positioned it as a bank with great potential and a major player in the
financial sector of the nation's economy.
“This, coupled with the
antecedent of the Bank's Chairman, Prince Samuel Adedoyin, an astute and
never-say-die businessman, who has made great exploits in the commerce
and manufacturing sectors, will ensure that we meet the regulatory
authority's requirement".
Sources close to the bank hinted further that the bank's liquidity
level will be further deepened through off- shore funding.
Recently, the bank secured a
$7 million (N945 million) short-term facility deal for telecommunications
company, MTS, from the US EXIM Bank. More of such offshore facilities are
said to be in the works by the bank.
The release stated further
that it could also consider other options to deepen its liquidity base
Such options, according to sources, could include capital market issues.
The bank’s business niche lies
in areas such as energy, international trade, public sector development,
aviation, telecommunications and World Bank assisted projects.
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