Posted by By Ayodele Aminu on
The on-going consolidation in the banking industry is set to record another major acquisition as indications emerged at the weekend that Oceanic Bank International Plc has stepped up discussions with Standard Bank of South Africa to acquire its Nigerian subsidiary, Stanbic Bank Nigeria Limited.
The on-going consolidation in the banking industry is set to record another major acquisition as indications emerged at the weekend that Oceanic Bank International Plc has stepped up discussions with Standard Bank of South Africa to acquire its Nigerian subsidiary, Stanbic Bank Nigeria Limited.
Oceanic Bank, THISDAY checks revealed, has finalized discussions to also take over International Trust Bank (ITB).
Standard Bank, THISDAY gathered, is expected to invest a minority shareholding stake in Oceanic Bank. The union, when successfully concluded, will shore up Oceanic Bank's standing among the mega banks in Nigeria.
Oceanic Bank's attraction to ITB, according to information, was informed by its extensive branch network in the Northern part of Nigeria, while Stanbic Bank is said to be strategic for its African and global franchise.
Stanbic developed its franshise not only through its parent company Standard Bank of South Africa, it has already established core competences in custodian, corporate and investment banking in Nigeria.
THISDAY had exclusively reported sometime ago that Standard Bank may have decided to pull out of Nigeria following its failed attempts to acquire United Bank of Nigeria Plc and Afribank of Nigeria Plc.
In the wake of the on going banking consolidation, which requires every bank in the country to either beef up its capital to N25 billion or merge with another bank or other banks to meet the prescribed capital before December 2005, Standard Bank was said to have decided that injecting $250 million in Stanbic did not match its business strategy.
Given this scenario, Standard Bank had expressed interest in acquiring UBA and Afribank, but the regulatory authorities would not allow any of the big banks in the country go into foreign hands.
After the move to acquire these two big banks failed, Standard Bank was said to have decided to pull out by selling about 90 per cent of its stake in Stanbic Bank, retaining only 10 per cent.
The rationale for retaining 10 per cent of its stake, THISDAY had reported, was to pave way for the bank's easy re-entry into the country.
Meanwhile, with the proposed acquisition of these two banks, it is envisaged that the new Oceanic Bank will produce a mega bank that would be strong in both corporate and retail ends of the market; leveraging on its enhanced international and geographical reach.
As at the end of September 2005, Oceanic Bank has increased its business offices to over 100, which is expected to grow to over 130 business offices nationwide after the proposed acquisition.
Oceanic Bank is among the few banks that have met and surpassed the N25 billion re-capitalization directive of the CBN. Whilst its shareholders' funds stood at N26.5 billion after its successful Initial Public Offer (IPO) in October 2004, it is expected that the bank, on its own, will rake in above N30 billion shareholders' funds at the end of its September 30, 2005 financial year. This is addition to the two acquisitions, would take Oceanic Banks shareholders fund to about N50 billion.
Other acquisitions that have been accomplished in the on-going consolidation include Diamond takeover of Lion Bank, First Cirty Monument Bank (FCMB) purchase of Nigeria-American Merchant Bank Limited (NAMBL) and Fidelity Bank acquisition of Manny Bank.