Nigeria’s Top Four Banks Open To Mergers And Acquisitions

TOP L-R; TONY ELUMELU & TAYO ADERINOKUN. BOTTOM L-R; OLABISI ONASANYA & JIM OVIA.

San Francisco (THEWILL) – Nigeria’s top four banks, First Bank, Guaranty Trust Bank, United Bank for Africa and Zenith have positioned themselves for mergers/acquisitions with other banks in a second round of consolidation.

The just concluded banking sector audit carried out in two batches by the Central Bank, revealed the strengths and weaknesses of all the banks, with the regulator eventually seizing nine banks, firing their management and injecting a whooping N600 billion naira (about $4 billion US dollars) into them.

THEWILL sources say management of the “Big-Four” banks which are easily the biggest in terms of assets, have zoomed into their acquisition gears, with banks like Diamond, FCMB, Fidelity, Skye, Ecobank and Equitorial, and Oceanic banks as top targets.

Recently, First Bank’s boss, Olabisi Onasanya gave an insight into his bank’s acquisition plans, but would not divulge particular targets, whereas words on the streets link it to Oceanic and Skye banks. Onasanya said his bank would use a 500 billion naira bond to acquire banks within and outside Nigeria.

The United Bank of Africa (UBA), through its spokesperson says the bank is open to mergers and acquisition opportunities but refuted suggestions that the bank was considering any deals with Diamond bank or any other bank at this time. However he said, “UBA has obtained regulatory/shareholders approval to raise N500bn additional capital through the issuance of bonds and equities within a two year period.” It expects to use funds to aggressively pursue its expansion in the continent.

Guaranty Trust Bank in its response to our inquiry refused to rule out the possibility of a hostile take-over or merger with any bank(s). In a note, its spokesperson said “GTBank will continue to monitor events in the Nigerian Banking Industry closely and our decision on mergers and acquisitions in the short to medium term will be based on the bank’s overall objectives of being the most profitable Nigerian Bank.”  

Zenith bank spokesperson would not comment officially on speculations that it is in talks with some of the weaker banks for a possible merger/acquisition.

The Central Bank chief, Sanisu Lamido while speaking in London last August had said he would encourage a foreign/domestic take-over of the seized banks.

The banks that did not pass the audits and stress tests are Oceanic, Bank PHB, Wema, Afribank, ETB, Skye, Union, Intercontinental, and Fin Bank.