Sterling Bank Plc has withdrawn its bid to buy Keystone Bank Limited over the price sought for the lender rescued bridge bank.
“We felt we wouldn’t get it at the price we are willing to pay,” Abubakar Suleiman, the Chief Financial Officer for Sterling Bamk, told Bloomberg, adding: “Keystone also didn’t fit in with the lender’s “current strategy.” He, however, did not give more details.
Keystone Bank Limited is the last of the three bridged lenders bought by the Asset Management Corporation of Nigeria (AMCON), set up by the government to buy bad loans after a debt crisis in 2009 threatened to cause the industry to collapse.
Keystone has assets of N318 billion ($1.1 billion) and operates two international units, according to Amcon, which appointed Citigroup Inc.’s Nigerian unit and FBNQuest, a unit of FBN Holdings Ltd., as advisers on the sale.
“Sterling Bank will focus on growing its existing businesses, unless “another opportunity comes for inorganic expansion,’’ Suleiman said. According to him, the lender plans to raise N65 billion in Tier 2 capital with 20 per cent of the first tranche of N35 billion of bonds to be sold this month.
“The bank expects loans to rise by 20 per cent this year following the devaluation of the naira,” Suleiman said. That compares with an earlier projection of less than 10 per cent.
Sterling Bank Chief Executive Officer (CEO), Yemi Adeola, had at a meeting with journalists in Lagos late last year, said six commercial banks are likely to seek mergers and acquisitions this year. The mergers, he predicted, are triggered by the shock created in their assets and balance sheet sizes in the face of declining oil prices.
Adeola said he envisaged possible shrinking in the number of local banks this year. “There are already moves suggesting that trend,” he said, but did not name any bank. The bank chief said two international banks were discussing with local lenders on possible acquisition.
Adeola said the Nigerian banking industry was the most regulated sector in the country, thereby affecting banks’ performance. “To say that everything will be rosy in 2016 will be deceiving ourselves. I think if the opportunities arise for banks to pursue further consolidation, we could see two or three,” he said.
