Bailed-Out Nigerian Banks May Seek London Listing Before Funding Deadline
Nigerian lenders bailed out by the central bank in 2009 may seek to list on the London Stock Exchange to raise funds before a deadline to recapitalize, said Ibukun Adebayo, the LSE’s head of primary markets for the Middle East and Africa.
Some of the eight lenders that received funds from the Central Bank of Nigeria have contacted the LSE about possible listings, Adebayo said. The central bank has ordered lenders to boost capital by Sept. 30 or it will withdraw interbank guarantees.
“Financial services in Nigeria are an area where we see increases in listings,” said Adebayo in an interview in London yesterday. He declined to say how many banks had approached the bourse because the discussions are confidential.
The central bank provided 620 billion naira ($4 billion) to eight of the nation’s 24 lenders after loans to equity speculators contributed to 700 billion naira of non-performing debt, according to the Economic and Financial Crimes Commission in Abuja. Governor Lamido Sanusi fired the chief executives of the distressed lenders and set up Asset Management Corp. of Nigeria, or Amcon, to buy bad debts from the banks to help recapitalize them before matching them with potential buyers.
The bailed-out lenders are Afribank Nigeria Plc (AFRIBANK), Bank PHB Plc (PLATINUM), Equatorial Trust Bank Ltd., FinBank Plc (FIRSTINL), Intercontinental Bank Plc (INTERCON), Oceanic Bank International Plc (OCEANIC), Spring Bank Plc and Union Bank of Nigeria Plc.
Oceanic Bank said it will meet the central bank’s deadline for completing its recapitalization and has received “several expressions of interest,” spokeswoman Monye Mpho said by phone from Lagos today. Oceanic Bank will choose the bidder that offers the “best value,” she said.
Oceanic Bank slumped for the seventh day, losing 4.8 percent to 1.6 naira at the 2:30 p.m. close in Lagos. Union Bank dropped 4.9 percent to 2.51 naira. Intercontinental Bank retreated 4.7 percent to 1.23 naira, Afribank fell 4.6 percent to 1.45 naira and FinBank slumped 4.8 percent to 59 kobo.
Oceanic Bank is yet to sign an accord with a potential investor after talks collapsed with First Bank of Nigeria Plc, the country’s third-biggest lender.
FinBank has signed an agreement to merge with First City Monument Bank Plc (FCMB), FCMB said on May 5. Union Bank said on March 23 it signed an agreement with African Capital Alliance under which the group will invest $750 million into the bank.
Access Bank Plc will merge with Intercontinental Bank, Access said on March 27.
The LSE has 18 companies trading on its main market and 56 on its Alternative Investment Market that are incorporated or have operations in sub-Saharan Africa. Four African companies have global depositary receipts listed on the exchange, including Lagos-based lenders Diamond Bank Plc (DIAMONDB) and Guaranty Trust Bank Plc. (GUARANTY)
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