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FirstRand hovers over Nigerian bank

Lagos - FirstRand, South Africa’s number two banking group, is in advanced talks with Nigeria’s Sterling Bank over making a strategic investment in the lender, banking sources familiar with the deal said.
 
Managing director Sizwe Nxasana, who took over the reins of FirstRand [JSE:FSR] over a year ago, told Reuters last year it was looking to invest “meaningful amounts of capital” in Nigeria and would fund any deal from its reserves.
 
It was the first foreign bank to announce its interest in buying one out of the nine Nigerian banks rescued by the central bank in a $4bn bailout in 2009, but later got cold feet.
 
Banking sources said FirstRand preferred to enter the Nigerian market through a strategic alliance with a healthy local bank and would be looking to deploy about $300 to $400m to fund such an investment.
 
Sterling Bank, not one of the bailed-out banks, has a market valuation of around 33.7bn naira ($225m) as at March 10.
 
FirstRand and Sterling Bank both declined to comment.
 
“They (FirstRand) are looking at making a strategic investment in Sterling,” one banking source told Reuters.

Apart from FirstRand, other deals are looming in Nigeria’s banking sector as new investors seek to recapitalise the rescued banks and a state-run “bad bank” AMCON has set a June timeframe to resolve the country’s banking crisis.
 
Banking sources said a consortium involving Vine Capital, a relatively unknown private equity firm, has put in a bid to acquire Finbank after the lender dismissed an earlier bid by local rival First city Monument Bank (FCMB).
 
“Finbank rejected FCMB’s bid and asked Vine Capital to make a bid,” another source - who declined to be named - told Reuters.
 
Banking sources said Vine Capital has signed a recapitalisation agreement with Afribank and intends to bid for Finbank, in order to merge it with Afribank.
 
Central Bank governor Lamido Sanusi said last week two of the rescued banks have signed memoranda of understanding (MoU) with new investors, and two more should sign this week or next.
 
Sanusi said he expected the deals to be completed within eight to 12 weeks of the agreements being signed.
 
“The MoU more or less captures negotiations that have been completed. What is left is basically ... implementation of the terms, obtaining the necessary shareholder and regulatory approvals,” Sanusi told Reuters.
 
“That we think should be done in eight weeks, maximum 12 weeks, from the signing of MOUs,” he said.
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