European Bank may buy into Nigerian banks
Nigeria - Corporate - 02-08-2010

The European Investment Bank may buy into Nigerian banks as its delegate meets with Nigerian officials including the Central Bank Governor Sanusi Lamido Sanusi on 8 February 2010. This is the 1st meeting between the EIB and Nigeriaquotes officials to discuss financial deals. EIB Vice President Plutarchos Sakellaris is leading a delegation of senior European Investment Bank executives to Nigeria to announce a number of key deals with the Nigerian financial sector. The delegate will also meet with Vice President Jonathan Goodluck, Ministers of Finance, Petroleum, Power and the National Planning Commission. A number of foreign banks have shown interest in the eight troubled Nigerian banks that were bailed out by the CBN. Already, a bank in London has been appointed as financial supervisor to work with two local companies like the Stanbic IBTC and another company in Nigeria.
EIB has said that in recent years it provided over EUR 220m to fund various projects in Nigeria. The bank said that this amount is alongside EUR 3.5bn of investment in Africa, Caribbean and Pacific countries under the Cotonou Mandate. In 2009, the bank invested in excess of EUR 79bn in projects across the European Union, Africa and beyond. EIB is the European Unionquotes long term lending institution, owned by all 27 member states. Meanwhile, FirstRand Limited and Standard Bank Group Limited, South Africaquotes 2 biggest banking groups, are said to have registered with the Central Bank of Nigeria to investigate and acquire one or 2 of the recently bailed out banks in the country. The timetable for buying any of the 10 rescued banks is to be determined by the CBN, but FirstRand Chief Executive Officer Sizwe Nxasana said that it may prefer to buy one of Nigeriaquotes “healthier” banks. “There are opportunities across the board,” Nxasana, 52, said. “We are still looking at all the options.” FirstRand first mooted its African expansion plans in June 2009 while Standard Bank is also looking to add to its assets in Nigeria.
While the countryquotes banking crisis last August saw the central bank inject NGN 620bn (USD 4.1bn) into 10 banks to cover bad debts, the economyquotes growth potential means Nigerian institutions offer “nice opportunities,” investor Mark Mobius said. Standard Bank, which already operates in Nigeria as Stanbic IBTC Plc after buying a Lagos based bank in 2007, may use acquisitions to bolster expansion. “Standard Bank sees further growth opportunities in Nigeria, both organically on the back of a well established local business, which is fully integrated into the rest of our network, as well as through select acquisitions that can facilitate faster development of our Nigerian business or add market share and scale,” Clive Tasker, CEO of the bankquotes African unit, said. The countryquotes 10 distressed lenders are Afribank Nigeria Plc, Finbank Plc, Intercontinental Bank Plc, Oceanic Bank International Plc, Union Bank Nigeria Plc, Bank PHB Plc, Spring Bank Plc Equatorial Trust Bank Plc, Wema Bank Plc and Unity Bank Plc. “There are risks in Nigeria but I believe FirstRand is well placed to help manage those risks with a local partner,” said Jan Meintjes, portfolio manager and director at Gryphon Asset Management in Cape Town, which owns FirstRand shares. “The opportunity far outweighs the risks.” “Because FirstRand does have excess capital it is a good time for it to now be acquisitive and arguably its entry to Nigeria will be cheaper than Standard Bankquotes,” said Neville Chester.

Source: Daily Trust