FirstRand eyes are on bank in Nigeria
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