Absa in talks with merged Nigerian banks
Stephen Gunnion
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Financial Services Editor
BANKING group Absa is in talks to buy a 51% stake in a newly merged Nigerian bank, as banks in that country scurry to find partners ahead of stringent new capital requirements that come into effect this year.
Absa yesterday confirmed it had signed heads of agreement with three merging banks, Habib, NUB International and Fountain Trust, but said talks were still at the preliminary stage.
“There is a lot happening, but it is still early days,” said Dana Botha, head of Absa’s Africa desk.
“We have to go through regulatory and board approvals on this side, and regulatory approval on that side — and a lot can still happen.”
Botha said Nigeria’s banks had been obliged to submit detailed plans of how they would meet the new capital adequacy requirements, including mergers, to the governor of Nigeria’s central bank by the end of March.
Signed agreements had to be submitted by the end of September. Botha was unable to give any price details as the banks had signed confidentiality agreements, he said.
Last month Absa bought a 50% stake in Angola’s Banco Commercial Angolano for $7,5m. It already owns majority stakes in banks in Tanzania and Mozambique and minority stakes in banks in Zimbabwe and Namibia.
Absa may also buy 49% of state-owned Zambia National Commercial Bank.
Nigeria has 89 banks, but it is estimated this will shrink to 12-16 when the new capital adequacy requirements come into effect at the end of the year.
The minimum capital requirement for banks is being raised from 2-billion naira (about R100m) to 25-billion naira.
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