LAGOS, Oct 29 (Reuters) – At least four of the nine Nigerian banks rescued in a $4 billion bailout last year are set to announce exclusive talks with potential suitors in coming days, banking sources said on Friday.
The central bank bailed out the lenders in an unprecedented rescue last year, warning they had become so weakly capitalised they posed a risk to sub-Saharan Africa’s number two economy. It has since been trying to find new investors.
Banking sources said Nigeria’s First City Monument Bank (FCMB) (FCMB.LG: Quote), one of the country’s healthy lenders, had bid for Finbank (FIRSTIN.LG: Quote), which was rescued in the first round of the bailout in August 2009.
The stock exchange said Finbank had announced it was in negotiations with a potential strategic investor but gave no further details. Finbank shares closed up 4.7 percent at 0.66 naira, shortly before the announcement.
“We have made a bid. I think ours is the preferred bid but we have not been announced as the winner yet,” a source at FCMB said, asking not to be named.
A source at Finbank also said FCMB was the preferred bidder.
Finbank is valued at 11 billion naira ($73 million) at current market prices, less than a tenth the size of FCMB.
Banking sources said Bank PHB (PLATINU.LG: Quote), Intercontinental (INTERCO.LG: Quote) and Union Bank (UBN.LG: Quote) were also in talks with potential suitors and would soon make announcements.
Central Bank Governor Lamido Sanusi said two weeks ago five or six of the rescued lenders would be announcing negotiations in coming weeks. [ID:nLDE69D1GQ]
He has said foreign institutions are involved in the bidding process, as well as local banks and private equity firms.
Finbank was created out of a merger between First Atlantic Bank, Inland Bank and IMB Bank during consolidation four years ago.
Analysts consider it a ripe acquisition target because it offers a niche business, and a potential acquirer will not exceed market share rules set by the central bank.
FCMB, established in 1982, has 150 branches across Nigeria, an investment banking subsidiary in London and a representative office in South Africa.
Central bank advisers have recommended a preferred bidder to acquire Bank PHB, whose board will meet to consider the proposal next week, another banking source told Reuters.
Intercontinental Bank will also announce talks with a possible core investor next week, a senior banker said.
Union Bank said on Thursday it too was in exclusive talks with a potential suitor. Banking sources said the negotiations were with a local private equity firm, potentially in conjunction with a consortium. [ID:nLDE69R292]
Nigeria has set up a state asset management company, AMCON, which will purchase non-performing loans from the rescued banks and chase their recovery in order to give the lenders liquidity and make them more attractive to new investors.
Delays to setting up AMCON have hindered progress on reaching deals for the rescued lenders.
Sanusi told CNBC Africa TV this week that the Senate was due to approve the board of AMCON next Tuesday and that it would start purchasing bad assets immediately thereafter. (For more Reuters Africa coverage and to have your say on the top issues, visit: af.reuters.com/ ) (Additional reporting by Oludare Mayowa; Writing by Nick Tattersall; Editing by David Hulmes) read more