FirstRand drops bid for Nigerian bank
Johannesburg - FirstRand [JSE:FSR], South Africa's second-largest banking group, said it has dropped acquisition talks with Nigeria's Sterling Bank after failing to agree on terms for the deal.
FirstRand said on Friday it had terminated talks to acquire a majority stake in Sterling Bank, which has about 99 branches in Africa’s most populous nation.
“The parties have been unable to agree to mutually acceptable terms,” FirstRand said.
South African lenders are keen to expand in fast-growing Nigeria, although the process so far has had plenty of hurdles. Nigeria in 2009 injected $4bn into nine lenders, deemed by auditors to have become so weakly capitalised that they posed a threat to the entire country’s banking system.
Sterling Bank, which has a market value of around $177m, was one of the lenders that passed the 2009 special audit.
FirstRand, which has said it is looking to invest “meaningful amounts of capital” in oil-rich Nigeria, said it still believes the country will be a key market for its Africa expansion strategy.
FirstRand shares were down 1.6% in Friday midday, trade while shares of Sterling Bank were little changed.