Posted by By Friday Atufe on
Union Bank of Nigeria Plc (UBN) and Afribank Nigeria Plc are bidding for the assets and liabilities of Hallmark Bank Plc.....
Union Bank of Nigeria Plc (UBN) and Afribank Nigeria Plc are bidding for the assets and liabilities of Hallmark Bank Plc, one of the 14 banks whose banking licence was revoked by the Central Bank of Nigeria (CBN). The licence was withdrawn because of its inability to meet the new minimum capital base of N25 billion prescribed for all banks by the CBN.
Dr. Ndi Okereke-Onyiuke, director-general of the Nigerian Stock Exchange (NSE) said in New Jersey, United States of America, that the two banks were bidding for Hallmark in response to CBN overtures to the 25 banks that emerged from the banking consolidation programme to acquire the assets and liabilities of those that failed to meet the policy requirement.
The director-general assured depositors of Hallmark Bank that as soon as a bidder emerged, the assets and liabilities of the bank would be transferred to it, adding that the liabilities the successful bidder cannot absorb will be paid off by the CBN.
Disagreement between the NSE and Hallmark Bank Plc over an ‘offensive' advertorial on missing title documents of the Stock Exchange Building jointly owned by the NSE and the Daily Times of Nigeria Plc had stalled the planned public offer of the bank during consolidation exercise in the banking industry.
The management of Daily Times put in place by the receiver manager appointed by Hallmark Bank to recover its over N700 million facility it extended to Folio Communications Limited, the core investor who acquired 94 per cent equity of the publishing company from the Federal Government under the privatisation of public enterprises, had published the offending article in a national newspaper.
But the management of the NSE reacted to the publication that it had paid for the equity of Daily Times in the building and therefore the issue of the missing titled documents of the building does not arise and demanded a retraction from the management of the Daily Times.
The NSE paid about N1.2 billion for the acquisition of 60 per cent shareholding of the Daily Times in the building.
Owing to the controversy that trailed the advertorial by the management of the Daily Times, Hallmark Bank, which appointed the receiver manager for the company could not conclude arrangement for a public offer it intended to use to shore up its capital base before the CBN directed banks that had yet to complete their capital issues for the purpose of the consolidation to wait until after the deadline of December 31, 2005.
Sequel to the botched attempt to raise fresh funds to meet the minimum N25 billion capital base prescribed by the CBN for all banks, Hallmark Bank made overture to merge with Union Bank but the deal could not sail through before the December 31, 2005 deadline set by the CBN.
Ecobank Nigeria Plc, a subsidiary of Ecobank Transnational Corporation (ETI), the West African bank, recently acquired the assets and liabilities of All States Trust Bank Plc, one of the banks that failed to meet the new capital base of N25 billion prescribed by the CBN.
It is presently addressing the issues of assets and liabilities of All States Trust Bank.
The apex had on July 6, 2004 directed all banks operating in Nigeria to raise their minimum capital base to N25 billion before December 31, 2005 in a bid to shore up their capital base to a level that they can compete in the global financial market.