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B N W: Biafra Nigeria World News |
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Four banks sign pact, form Intercontinental Bank Group
AFTER a series of boardroom consultations, four banks yesterday shed their individual toga to form the Intercontinental Bank Group. Heads of the merging banks signed the memorandum of understanding (MOU) in Lagos.
The banks are Intercontinental Bank Plc, Equity Bank of Nigeria, Gateway Bank Plc and Global Bank Plc.
After the group's Board of Directors' meeting in Lagos yesterday, the Vice Chairman and Chief Executive of Intercontinental Bank Plc, Mr. Erastus Akingbola, said that the banks had agreed to pursue a merger into a single entity subject to obtaining all necessary approvals from the regulatory authorities.
"To this end, therefore, we signed a memorandum of understanding today (yesterday) to commence the implementation of the consolidation process. We shall formally notify the regulatory authorities any moment from now," he said.
Akingbola further said that while the board awaits the approval, it will continue to pursue the various business expansion plans that will ensure the realisation of the full potential of the envisaged new mega bank while perfecting the existing group synergy.
He recalled that the banks have hitherto operated separately but as members of a group of financial institutions with interlocking ownership, identical business models and group operational synergy for over eight years.
The bank chief said that the group was ready to admit more banks into its fold, adding that "in the face of a drastic change in the market place, we now envisage that after the successful conclusion of the expansion by all the individual member banks, we shall integrate our total strength to roll out a banking institution large enough to alter the structure of competition in the industry."
One of the important issues in the consolidation is who heads the new outfit?
Attempting this question, Mr. Raymond Obieri, chairman of Intercontinental Bank Plc, said: "We have a young, dynamic Chief Executive, (referring to Akingbola) who has not indicated to resign. And even if he does, we will refuse. Also, we have other young managing directors who can do the job. So, the choice of who heads the outfit is not a problem now."
Also, the Managing Director and Chief Executive of Gateway Bank Plc, Mr. Samuel Olatunji, had told The Guardian that the top actors in the group are core professionals who are more interested in moving it forward instead of clamouring for individual posts.
Similarly, the Managing Director of Equity Bank, Mr. Akin Ajayi, noted that when the group might have finished with its consolidation scheme, there would still be enormous tasks ahead. He said that even though the group would have one managing director, there would still be enough responsibilities for the others to grapple with.
His Global Bank counterpart, Mr. Yinka Obalade, did not sound different. He said that the beauty of the group's consolidation is that with its financial muscle, it will expand to Europe and even the West African region thereby creating opportunities and new challenges for investors, customers and the workers.
Akingbola said that "we would advise the group to adopt the City Bank or the Hongkong Shangai Banking Corporation (HSC) model.
"Under it, the MDs will have a lot of jobs to do, as a division in any of the banks."
The group's shareholders' funds now stand at N16.6 billion, with "projection of N26 billion at the end of 2005. It is proposing a right issue to the shareholders to meet the new N25 billion capital base.
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