March 28 (Easy kobo) - Access Bank Plc announced that it would merge with Intercontinental Bank, one of the nine rescued banks. No financial details were disclosed except that an MOU between the two Organizations has been signed. The business combination of Access Bank plc and Intercontinental Bank plc is expected to create one of Africa's largest financial institutions. Visit www.easykobo.com daily to stay up to date with Nigeria's financial environment.
Access Bank CEO Mr. Aigboje Aig-Imoukhuede said that "These are two organisations that share potential synergies and are very complimentary, in terms of what is strong in one is not strong in the other, This is an ideal ground for a value-adding business combination"
Retail banking is the core of Intercontinental Bank plc where as Access Bank's core efficiencies lie in Wholesale and Commercial Banking. The merger would thus create synergies for the new business that could truly create an African banking giant. The name of the new Organization has not yet been disclosed. The new stock structure also has not yet been disclosed.
Access Bank was not one of the rescued banks. This is the secondbank dealannouncement within a week after Union Bank disclosed last week that it has agreed a deal worth $750 million with African Capital Alliance private equity firm. Among other rescued banks expected to announce deals are Bank PHB, Oceanic Bank, Finbank andAfribank.
In 2009, CBN Governor Lamido Sanusi started the process of cleaning up Nigeria's banking sector. 9 banks were bailed out in a $4 billion industry wide bailout and charges were put on their CEO including criminal charges. In 2010 CBN created Asset Management Company of Nigeria (AMCON)basically a bad bank. AMCON's main duty was to purchase bad loans from rescued banks and inject fresh capital into those banks to shore up their shareholders' equity. AMCON started buying bad debts from rescued banks in january 2011 and is on track to soak up all bad debt by the end of March 2011. AMCON issued 0 coupon consideration bonds to banks in exchage for bad loans. These consideration bonds will become tradable by June 2011 according to AMCON deadlines.
At NSE today, Access Bank is trading lower by 1.62% at N 8.50 (11:45 a.m)
Intercontinental Bank was trading higher by 4% at N 1.54 (11:45 a.m)
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