Prudent, Magnum, 3 Other Banks Merge
Wema, Fountain Trust, Lead may sign MOU tomorrow
By Ayodele Aminu
Five banks - Prudent Bank Plc, Magnum Trust Bank Plc, EIB International Bank Plc, NBM Bank and Trust Bank of Africa - are coalescing to form a mega bank in line with the on-going consolidation in the banking industry.
A Memorandum of Understanding (MOU) to this effect would be signed today in Lagos where the name to be adopted by the emerging institution is expected to be unveiled.
Presently, the Prudent Bank group, according to sources, have pooled together shareholders' fund in excess of N15 billion which is expected to be beefed up to over N25 billion before the end of next year, while their branch network, which stands at 120, is expected to also be raised to 200. The total deposit base of the group was also put at over N66 billion.
Although officials of the five banks would not want to comment, THISDAY checks revealed that the consortium would dispatch a letter detailing these developments to the Central Bank of Nigeria (CBN) immediately after the MOU is signed today. The group has also slated a meeting for the week with other regulatory authorities such as the Securities and Exchange Commission (SEC) and the Nigeria Stock Exchange (NSE).
The synergy and expertise in different areas that will follow the fusion of the five banks are expected to make the emerging bank one of the most dynamic in the country.
While Prudent Bank's branches are strategically located across the country, Magnum Trust Bank has a strong presence in Lagos.
Besides, Prudent Bank whose MD/CEO, Mr. Akinsola Akinfemiwa, has garnered over 30 years of banking experience is reputed for its niche and track record in commercial banking, Small and Medium Scale Enterprises financing and estate development. A formidable pool of expertise and aggressive marketing drive saw its transformation into one of the fastest growing commercial banks in the country within a very short time.
Another added advantage of the fusion of the consortium is culture, which is very important in mergers. Akinfemiwa and the MD of Magnum Trust Bank, Mr. Babatunde Dabiri, who also has over 30 years of banking experience were among those who nurtured and transformed Chartered Bank Plc. Magnum Trust Bank has also over the years carved a niche for itself in the retail end of the market.
EIB International Bank in which the Lagos State Government has substantial interest, is also a strong player in the Southern part of the country. The emerging bank would therefore have the support of the Lagos State Government.
NBM Bank, a subsidiary of Bank Belgolaise, is expected to bring into the emerging bank foreign lines of credit and expertise. Bank Belgolaise with headquarters in Brussels and branches in London and Paris is a fully owned subsidiary of the Fortis Group with assets of US$600 billion as at end of 2003.
Meanwhile, Wema Bank Plc, Fountain Trust Bank and Lead Bank Plc, THISDAY investigations also revealed, are expected to sign an MOU tomorrow in Lagos. THISDAY could not, however, confirm the status of the fusion of the three banks as to whether it is going to be a merger or acquisition. Sources close to the three institutions described the union as "a merger of equals."
First Amalgamated Bank comprising of Allstates Trust Bank, Gulf Bank, Hallmark Bank, Lion Bank and Universal Trust Bank had blazed the trail about two months ago, emerging as the first bank to sign an MOU to formalize their merger.
Next came the Intercontinental Group consisting of Intercontinental Bank Plc, Equity Bank of Nigeria Limited, Gateway Bank Plc and Global Bank Plc, which signed theirs two weeks after.
Just last week, four banks - First Atlantic Bank Plc, Assurance Bank Limited, Manny Bank Plc and Guardian Express Plc also signed an MOU to strengthen their position in the on going restructuring in the banking industry. The results of the fusion of the four banks are the formation of a mega bank to be known as Astrabank Plc.
Also last week, Guaranty Trust Bank Plc (GTB) swallowed Inland Bank Plc to become the first bank to make an acquisition since the Governor of the CBN, Professor Charles Soludo on July 6, 2004 directed all banks to increase their capital from N2 billion to N25 billion before end-December 2005.
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