FirstRand, South
Africa’s No. 2 banking group, is in advanced talks with Nigeria’s
Sterling Bank over making a strategic investment in the lender, banking
sources familiar with the deal said.
Managing director,
Sizwe Nxasana, who took over the reins of FirstRand over a year ago,
told Reuters last year the South African bank was looking to invest
“meaningful amounts of capital” in Nigeria and would fund any deal from
its reserves.
It was the first
foreign bank to announce its interest in buying one out of the nine
Nigerian banks rescued by Central Bank in a $4 billion bailout in 2009
but later got cold feet.
Banking sources
said FirstRand prefer to enter the Nigerian market through a strategic
alliance with a healthy local bank and would be looking to deploy
around $300-$400 million to fund such an investment.
Sterling Bank, not
one of the bailed-out banks, has a market valuation of around 33.7
billion naira ($225 million) as at March 10. FirstRand and Sterling
Bank both declined to comment.
“They (FirstRand) are looking at making a strategic investment in Sterling,” one banking source told Reuters.
Apart from FirstRand, other deals are looming in
Nigeria’s banking sector as new investors seek to recapitalise the
rescued banks and a state-run “bad bank”. AMCON has set a June
timeframe to resolve the country’s banking crisis.
Banking sources
said a consortium involving Vine Capital, a relatively unknown private
equity firm, has put in a bid to acquire Finbank after the lender
dismissed an earlier bid by local rival, First City Monument Bank
(FCMB).
“Finbank rejected FCMB’s bid and asked Vine Capital to make a bid,” another source told Reuters, declining to be named.
Banking sources
said Vine Capital has signed a recapitalisation agreement with Afribank
and intends to bid for Finbank in order to merge it with Afribank.
Central Bank
governor, Lamido Sanusi, said last week two of the rescued banks have
signed Memoranda of Understanding (MoU) with new investors and two more
should sign this week or next.
Mr. Sanusi said he expected the deals to be completed within 8 to 12 weeks of the agreements being signed.
“The MoU more or
less captures negotiations that have been completed. What is left is
basically … implementation of the terms, obtaining the necessary
shareholder and regulatory approvals,” Mr. Sanusi told Reuters in an
interview in his office.
Reuters
