FirstRand eyes are on bank in Nige­ria

The Star Early Edition - - BUSINESS REPORT - Ka­tia Porze­can­ski and Colin McClel­land

THE CRI­SIS in Nige­ria is throw­ing up op­por­tu­ni­ties for Africa’s largest bank.

FirstRand, which is seek­ing an ac­qui­si­tion of a mid­sized lender in the con­ti­nent’s most pop­u­lous na­tion, is also con­sid­er­ing one other tar­get af­ter end­ing talks with two lenders, be­cause of dif­fer­ences over price, chair­per­son Lau­rie Dip­pe­naar said.

The Jo­han­nes­burg-based com­pany would pre­fer an in­sti­tu­tion with a big branch net­work, though is un­likely to buy any of the coun­try’s large banks, he said. “Deals crop up,” Dip­pe­naar, 68, said in an in­ter­view at the an­nual meet­ing of the World Eco­nomic Fo­rum in Davos.

“And the tougher it gets with the oil price, we get ap­proached.”


Nige­ria is in the grip of a year-long re­ces­sion as the coun­try strug­gles to cope with oil prices that have halved since mid-2014 and a short­age of for­eign cur­ren­cies that has caused the naira to plunge in value. The econ­omy’s woes have spilled on to the books of the coun­try’s small- and medi­um­sized banks, with trou­bled loans across the in­dus­try soar­ing to al­most three times the reg­u­la­tory limit, while cap­i­tal lev­els are de­creas­ing.

Mid-sized lenders in­clud­ing Di­a­mond Bank, Ster­ling Bank and Wema Bank tum­bled more than 40 per­cent last year. FirstRand walked away from buy­ing con­trol of La­gos-based Ster­ling Bank in 2011, be­cause the ask­ing price was too high.

The lender’s in­vest­ment-banking unit is al­ready op­er­at­ing in Nige­ria, and in 2012, FirstRand said it was look­ing for an ac­qui­si­tion to help fund Rand Mer­chant Bank’s op­er­a­tions in the coun­tryy. – Bloomberg

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