The Nigerian banking sector has experienced significant merger and acquisition activity in recent years, driven by a number of factors including regulatory inducement, increased competition, and the need for banks to expand their operations and reach a wider customer base.
Interestingly, most of the leading banks operating in the country today, have in one way or the other involved in the exercise either inform of business combination or outright sale and acquisition.
However, alleged experience in the last one decade, may have sent shock waves into the spines of regulators, investors and discerning Nigerians.
This is so as the Central Bank of Nigeria, (CBN) has made M&A as one of the most viable options for banks to meet the new capital base requirement.
Sources closer to the regulatory bank told Metrobusinessnews.com (MBN) weekend that the concept as one of the options for the current recapitalisation is causing disquiet, following alleged manipulation in the recent exercises.
Providus Bank Limited, a commercial bank founded in 2016, last year commenced steps to acquire majority stake in the over 20 years Unity Bank Plc, as part of the former’s business expansion plan.
The arrangement with Unity Bank, which
had been struggling to beef up its minimum capital requirement since 2017, is seen by their staff as more of a business combination, and had reached final stage before the new government and subsequent new leadership at the bank came on board.
But, since the Yemi Cardoso administration, the issue has been kept in the cooler for other pressing issues threatening the industry.
“I cannot tell you the exact position on the proposed business combination since it’s nolonger on the priority list of Cardoso administration. But one thing I know is that both parties have gone back to the drawing table. This is so because of alleged controversies on similar exercises conducted or in the pipeline,” a source with Unity bank told MBN.
There are other acquisitions for which the banks are said to be doing well, but not without allegations of shady deals, particularly and allegedly masterminded by the immediate past governor of CBN, Godwin Emefiele. They include Polaris, Keystone banks, among others.
Specifically, the report of the special investigator, Jim Obazee, had alleged that Emefiele used proxies to acquire Union Bank of Nigeria for Titan Trust Bank Limited, as well as Keystone Bank without any evidence of payment.
As a result, it recommends that the Federal Government should reverse the sale of the banks and also take them over.
A credible source with Keystone bank confided in MBN that the allegations need to be investigated and culprits punished.
Speaking in measured tone, the source said,”The federal government, should investigate or rather cause action to be taking on the acquisition of keystone as it is difficult to confirm if any payment was made.”
ALSO READ:Anxiety As Adesola Adeduntan resigns as First Bank MD Months Before Tenure Expiration
Another source in the banks decried the ignoble role played by the Asset management corporation of Nigeria, (AMCON) the bad bank that was supposed to take over the bad loans of banks.
“On the alleged ignoble role played by AMCON and CBN in colusion with some top and highly connected Nigerians, I think, the present government should know better and capable of unraveling the alleged infractions. It should not be just removing the actors alone, but that Nigerians deserve to know what and how they happened that few individuals could acquire collective assets and in this case, Keystone bank, and go away scot-free,” he said.
