Merging Banks to Shop for Independent CEO
Banking
By Ayodele Aminu
All the managing directors/chief executive officers of the first five banks that announced their merger penultimate Monday may have elected not to be directly involved in the running of the affairs of the new bank, THISDAY checks have revealed.
The five banks, namely Gulf Bank, Allstates Trust Bank, Hallmark Bank, Lion Bank and Universal Trust Bank which signed a Memorandum of Understanding (MOU) two Fridays ago according to sources, are currently shopping for a neutral person to run the affairs of the new bank proposed to be known as "First Consolidated Bank of Nigeria."
"The managing directors of the five banks have decided to stay off. They unanimously agreed that a neutral person should take charge of the new bank. They are really not bothered.
"It is really a painful decision. The legacy, they insist, is for the new bank to live after them. They believe that their respective institutions are greater than any other interest," our sources disclosed.
The voluntary decision of the merging banks' MD/CEOs to keep off when the new bank finally kicks off next year is no doubt, a demonstration the fact that they have the love of their respective banks at heart.
For summoning up such courage the helmsmen of these institutions should be commended and probably be given a special recognition by the Central Bankers of Nigeria (CBN) by a way of incentives to allow other merging banks emulate them.
Our sources further revealed that the merging banks which met again at the weekend in Victoria Island, Lagos agreed that all the necessary arrangement for the merger should be completed by November to enable the new bank commence operations January next year.
The merging banks THISDAY also gathered have started conceptualizing their brand, reputation and media strategies.
The five banks were reported penultimate Monday to have discarded family ego and ethos and agreed to form the first amalgamated bank under the on-going consolidation in the banking industry.
These banks had last Wednesday met with the Governor of the Central Bank of Nigeria (CBN), professor Charles Soludo Abuja and demanded among other things that tax incentives be reviewed, asked for five -year holiday, urged the CBN to organize a seminar on the banking reform as well as allow the consolidated banks use their Small and Medium Industries Equity Investment Scheme fund to meet the redundancy payments to enable staff own small and medium enterprises.
They also urged the CBN to set up an asset management company to enable the orderly asset management and recovery of loans with the assistance of law enforcement agents. In addition, they asked the Nigeria Deposit Insurance Corporation and the CBN to establish consolidated transaction relief fund to pay for services on a graduated bases.
The merging banks at the end of the day would be pooling together shareholders' fund in excess of the N25 billion required by the apex bank as minimum capital base for all banks and a nationwide branch network of close to 200 spread across the six geo-political zones in the country.
About nine banks were initially billed to sign the MOU penultimate Friday but the four others could not consummate the deal because they were yet to get the final approval from their respective boards.
This puts the emerging bank in the top brackets in the industry in terms of earnings, deposits, assets and balance sheet size.
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