Consolidation:Gateway Bank Targets N15 Bn Capital
By Olugbuyiro Akinola
As the race for N25 billion minimum capitalisation heats up in the Nigerian banking industry, Gateway Bank Plc is set to raise its capital to N15 billion to place it at a vantage position in the on-going merger with Intercontinental Group.
The additional fund is expected to be raised by a way of private placements billed to commence soon.
Chairman, Gateway Bank Plc, Chief Samuel Adegbite made this known at the end of the Extra -Ordinary General Meeting in Lagos yesterday.
The Bank, in a bid to scale through the hurdle of the Central Bank of Nigeria's directive on N25 billion, on September 16th, 2004, signed a Memorandum of Understanding with Intercontinental Bank Plc along with the two other banks within the group (Global Bank Plc and Equity Bank of Nigeria Limited).
The Intercontinental Group is currently targeting N40 billion, in which each member is expected to raise N10 billion.
The current target, explained Adegbite, is to consolidate the position of Gateway Bank before ultimately merging with
Intercontinental Bank Group, and make it a better partner in the merger.
"Of all options open to us to meet this challenge, the Board came to the position that consolidating with our related banks, that is, Intercontinental Bank Plc, Equity Bank of Nigeria and Global Bank Plc, is the best, " Adegbite added.
The merging banks he stressed, ''are family banks, which have related shareholders, many common Board members and have been involved in exchange of staff and management.''
He further explained that banks in the group also share common vision, culture, policy, practices and business transactions.
Specifically, he said the EGM is to seek the investors' authority to raise equity by way of private placement or by any other means deemed appropriate as well as capitalise any of the excess subscription in respect of the rights issue of 1,205,470,930 ordinary shares of 50 kobo each at N1.75 per share.
Adegbite indicated that a synergy has been built into the bank's expansion programme such that a merger of business and operational structures would be most compatible and seamless.
"The consolidated entity (i.e. Intercontinental Group) will have one of the most formidable management teams, huge capital base, one of the largest branch networks, an excellent array of financial products, a strong brand and an impressive pool of professionals," he emphasised.
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