Standard Bank puts Nigeria deal on hold :: Namibia Internet Gateway cc ::

Articles: Standard Bank puts Nigeria deal on hold

Posted by admin on Thursday, April 13, 2006 - 08:40 AM

STANDARD Bank has agreed with Nigeria’s Oceanic Bank to put on hold a proposed merger deal, the banks said today.
Reuters

Under the transaction, Oceanic would have acquired Standard’s Stanbic Bank Nigeria and Standard Bank would have taken a sizeable minority stake in Oceanic Bank. Talks have ended for now because Stanbic Nigeria has recapitalised under government guidelines and Oceanic was busy integrating its takeover of Nigeria’s International Trust Bank, a Standard Bank official said. Nigeria last year moved to reform its fragile and crowded banking industry by raising the minimum capital requirement for all banks to $188,4m by the end of last year, prompting a flurry of merger and consolidation activity. In December, when it appeared that a deal with Oceanic would not be completed by the end of the year, Standard said it would capitalise Stanbic Bank Nigeria with an additional $180m. "We’re under less pressure to do a deal and they’re busy with integration," Kevin Wingfield, director of acquisitions for Stanbic Africa, told Reuters. "We’re not in talks at the moment but it doesn’t mean to say that in time, once they’ve got the integration completed and depending on where we are at that point, we may sit down around a table and resume discussions about a potential merger." In November, Standard agreed to pay $200-$300m for a minority stake in Oceanic, sources close to the deal in Nigeria said at the time. By the end of last year, 25 banking groups had emerged from the forced consolidation of the Nigerian banking system. Nineteen new groups, including Oceanic, emerged from mergers between 72 formerly separate entities, while six banks decided to go it alone, including Stanbic. Standard has failed twice to expand in Nigeria, sub-saharan Africa’s second largest economy, since the central bank’s July 2004 direction to banks to recapitalise, but Wingfield said the bank would keep looking for opportunities. "At the end of the day, we’d like to play in the retail market in Nigeria and it is unlikely that we’d do it through organic growth, so we will make an acquistion, so the question is, is it Oceanic or is it something else," he said.

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