Four banks to merge today, target N200b(First Atlantic Bank Plc , Assurance Bank Limited , Manny Bank Plc, Guardian Express Bank Plc)
By Enitar Ugwu
ANOTHER set of banks prepares to wriggle out of the N25 billion capitalisation noose today as they sign a Memorandum of Understanding (MOU) for merger in Lagos.
They would be the third group of banks to merge since the Central Bank of Nigeria (CBN) directed each bank to raise its capital base to N25 billion by the end of 2005 or close shop.
They are First Atlantic Bank Plc, Assurance Bank Limited, Manny Bank Plc and Guardian Express Bank Plc.
It was learnt that the final agreement to publicly sign an MOU today was reached on Friday.
According to sources, a fifth bank of northern origin pulled out at the last minute to seek the necessary approval from its board.
The name for the group will be unveiled today. To this effect, irrespective of the strike by the Nigeria Labour Congress (NLC) slated to begin today, arrangements are at advanced stages at the Eko Hotels for the signing ceremony.
The managing director and chief executive officer of Assurance Bank, Mr. Chika Mbonu, had recently told The Guardian of the plans by his bank to meet the N25 billion capitalisation target.
He said: "The new Assurance Bank is a merger of Parmex Gen Sec Consortium and investors in the proposed Almond Bank of Nigeria Limited."
This merger, according to him, has been successful and has resulted in the bank's movement to the path of profitability and growth with greater market relevance.
But he disclosed that the bank had already begun discussions with other players with similar shared values within the industry, which would be concluded soon.
Mbonu had stressed: "With a network of 23 branches covering 13 states of the federation, we can build synergies with institutions that will be in the interest of all stakeholders, especially our customers."
The managing director, First Atlantic Bank Plc, Mr. Okey Nwosu, had disclosed about two weeks ago that his bank had finalised an MOU for merger with other banks, pointing out that the plan would give birth to a consolidated entity with a balance sheet size of over N200 billion in total assets, shareholders' funds of up to N30 billion and an extensive branch network of more than 180 branches.
He said that as a prelude to this, First Atlantic Bank's performance in year 2003 represented the establishment of a strong base that would guarantee a higher earning capacity for the future.
He added that with a branch network of 47, the bank was able to achieve a rare growth in all performance indicators.
Two other groups had earlier emerged.
First Consolidated Bank of Nigeria, comprising Allstates Trust Bank, Lion Bank and Gulf Bank, signed an MOU on September 3, 2004.
This was followed by the Inter-continental Bank Group (IBG) comprising Inter-continental Bank, Equity Bank, Gateway Bank and Global Bank. The group signed its MOU on October 16, 2004.
The governor of the Central Bank (CBN), Charles Soludo, announced banking reforms on July 6, 2004, which stipulated that banks' capitalisation must be to the tune of N25 billion.
The only acceptable way to achieve this, according to him, is through mergers and acquisitions.`
