The nation’s two-year old banking crisis moved closer to a resolution as First City Monument Bank (FCMB) said it would seek shareholders’ approval on September 29 to acquire Finbank.
The? bank is among five financially healthy banks seeking approval for mergers with rescued peers, and is the third to announce a shareholder vote on a finalised deal.
FCMB said in a notice to shareholders that the meeting would enable a vote on whether to allow the bank to either issue its shares or pay cash to the shareholders of Finbank as consideration for the transaction.
FCMB, which signed merger agreements with Finbank in July, did not disclose any financial details for the deal.
The central bank bailed out nine banks in 2009 by injecting N620billion to keep them afloat after reckless lending and lax management left them close to collapse.
The bail-out has created opportunities for a consolidation in the banking industry and for healthy peers like FCMB to scale up their capacity.
Access Bank , which is acquiring rescued Intercontinental Bank , has also announced a shareholders’ meeting. Another peer, Oceanic and Ecobank Transnational Incorporated , the parent firm to Ecobank have revealed their plans to merge.
FCMB has 133 branches with a market value of N104 billion, while Finbank has 180 branches and is worth N8.4 billion.
Chief executive, Ladi Balogun, told investors in July that FCMB would not need to raise capital to finance the acquisition of Finbank and that he expected to obtain both regulatory and shareholders’ approval within a 40-day period.
FCMB in November obtained $70 million of funding from the private sector arm of the World Bank, the International Finance Corporation(IFC) to help finance the potential acquisition of a distressed rival.
It said the funding consisted of a $50 million long-term senior loan and a $20 million convertible loan. FCMB said it would also seek shareholders’ vote to ratify the loan.
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