Five more banks sign merger pact today
By Enitar Ugwu
TODAY, five banks, namely Prudent Bank, NBM Bank, Trust Bank, Magnum Trust Bank and EIB International Bank will sign a Memorandum of Understanding (MoU) with an intention to merge into a single bank.
A deal to this effect was sealed among the five banks late last week.
Also, the signing ceremony will take place in Lagos at Eko Hotel, Victoria Island.
This merger will be the fifth since the July 6 announcement of the consolidation policy by the Central Bank (CBN).
So far, there has been three mergers and one acquisition.
First Consolidated Bank of Nigeria, comprising Allstates Trust Bank, Universal Trust Bank, Gulf Bank, Hallmark Bank and Lion Bank, signed their MoU on September 3.
This group was followed by the Intercontinental Bank Group, which signed its MoU on Sep`tember 16.
The Intercontinental Bank Group comprises Intercontinental Bank, Equity Bank, Global Bank and Gateway Bank.
The third group of banks under the umbrella name of Astrabank Plc signed its MoU on October 11.
Banks in this group are Manny Bank, Guardian Express Bank, First Atlantic Bank and Assurance Bank.
Also, on October 14, Guaranty Trust Bank Plc acquired Inland Bank Plc making the first acquisition effort since the CBN consolidation agenda began.
According to our source, although the name to be adopted by the latest merging banks has not been made public, they are relying heavily on the value proposition of the alliance and the post-merger strategic position.
The five banks are expected to showcase some of their individual strong points as well as financial assets at the MoU signing ceremony.
For instance, Prudent Bank has brand power, real estate business, commercial consumer and retail banking and 32 branch network as unique assets.
NBM, on its part, has good corporate banking competence, good public sector collections and strong financial backing of the Fortis Group.
EIB is joining the alliance with its strong government support and strong shareholders' funds, while Magnum Trust Bank has strong capital base and good retail banking as strong assets.
It would be recalled that the CBN Governor, Prof. Charles Soludo, had on July 6 announced a new minimum capitalisation level of N25 billion for banks by December 31, 2005.
He also argued that the new policy was part of the reform programme of government and advised banks to embrace mergers and acquisitions as the way out for some of the weak banks in the country.`
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