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The Merger and Acquisition of Nigerian
Banks From 2007 Till Date
By ARTICLES | Published: JUNE 11, 2013
The Merger and Acquisition of Nigerian Banks From 2007
Till Date
Merger and Acquisition of Nigerian Banks Merger according to Oxford
Advanced Learners Dictionary 7th ed. Is the act of joining two or more
organizations or businesses into one. While acquisition is something that
somebody buys to add to what they already own, usually something valuable.
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In his definition of the term (Gaughan 2007) defines merger as a combination of
two or more co operations in which only one cooperations survive. He also states
that the acquiring company assumes the assets and liabilities of the merged firm.
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The term merger then, refers to the combination of two or more organizations
into one larger organization such actions are commonly voluntary and often
results to a new organizational name. This is usually done by combining the
names of the original organization, usually the one that has the largest share or
ownership. An example is seen in Table 1 below, where the bigger or sound firms
name overrides the constituent names.
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Acquisition, on the other hand is the purchase and total takeover of all the
property (assets and liabilities) of the purchased institution. From this definition
rendered so far, one can deduced that the two terms can be used interchangeably
but that should not compromise the sharp difference between them.
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MERGER AND ACQUISITION OF NIGERIAN BANKS ITS IMPACT
ON THE NIGERIA BANKING INDUSTRY.
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On the impact of merger and acquisition in the banking industry and in
economic growth kaur and kaur (2010) noted that mergers and acquisition in the
banking industry are aimed at achieving economies of scale and scope. This is
because as the size increases, the efficiency of the system also increases.
Banking Industry in Nigeria, has undergone a lot of changes and transformation
in policies and operations, courtesy of merger and acquisition that was made
possible with the coming of Professor Charles Soludo, as the Central Bank of
Nigeria (CBN), Governor and the subsequent announcement on July 6, 2004 that
the minimum capital requirement base of banks in the country be moved up from
the previous two (2) billion naira to twenty five (25) billion Naira ; citing that
cases of bank failure in the 1990s and early 2000s was the major motives for
this change and subsequently, that the deadline for the final phase of the
consolidation should be December, 2005.
This announcement is the bedrock of the strong and efficient bank(s) that we
witnessed lately. Which is due to the mergers and acquisitions in the industry, as
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it led to a tremendous growth in the economy. Though, it is not complete or
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on the Thematic
Theme
perfect
outing
for Built
the then
Governor,
asFramework.
with his leaving office, and New
Governor in place, there is indication that some of the new banks is not perfectly
in good condition as noted by Sanusi (2010) however says neither the industry
nor the regulators were sufficiently prepared to sustain and monitor the sectors
exclusive growth. And thus, the recent acquisition of the unsound bank(s) by a
more viable ones.
Tables below shows a thorough breakdown of the merger and acquisition of
Nigerian banks that have taken place since the tenure of Professor Charles Soludo
to the incumbent (CBN) Governor, Mallam Sanusi Lamido Sanusi which saw the
previous 89 banks before 2005, coming down to 25.
Table I (Merger and acquisition of Nigerian Banks in the early phase
2004 and 2005)
S/NO
NEW BANKS
CONSTITUENT MEMBERS
1.
Access Bank PLC
Access Bank, Marina Intl. Bank
and Capital Bank Intl.
2.
Afribank Nig. PLC
Afribank Plc and Afribank lntl.
(Merchant Bank)
3.
Bank PHB Plc.
Plantinum Bank Limited and
Habib Nig. Bank Limited.
4.
Diamond Bank Plc.
Diamod Bank, Lion Bank,
Devcom Bank Ltd.
5.
Fidelity Bank Plc
Fidelity Bank, FSB Intl. Bank,
Manny Bank.
First Bank of Nig. Plc
First Bank Plc, MBC, Intl Bank
And FSB (Merchant bank)
Equational Trust Bank
PLC
Equational Trust Bank Ltd and
Devcom Bank ltd.
First city monument
Bank Plc
First city moment bank, coop
Dev. Bank, Nigeria-American
bank and Midas Banks
First Inland Bank Plc
First Atlantic Bank, Inland Bank,
Nigeria Plc, IMB Intl. Bank PLC
And NUB Intl. bank.
10
IBTC Chartered bank
plc
IBTC, charterd Bank plc and
Regent Bank PLC.
11
Intercontinental Bank
plc
Citizen international bank, ACB
international bank guidance
Express bank, omega bank trans.
12
Oceanic Bank Intl. plc
Oceanic Bank intl. bank plc and
intl. trust bank.
13
Sky Bank plc
Prudent Bank Plc, Bond Bank
Ltd, Reliance Bank Ltd,
Cooperative Bank Plc And ETB
intl. Bank ltd.
14
Spring Bank Plc
Citizen Intl. Bank, Acb Intl.
bank guardians Express bank,
onga bank. Trans. Intl. bank,
and Fountain trust bank.
15
Sterling Bank PLC
Trust Bank, Afica Ltd. NBM
Bank Ltd, Magnum Trust Bank
NAL Bank Plc and indo-Nigeria
Bank.
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16
Uited Bank for Africa
PLC
United bank for Africa PLC,
standard trust bank plc, and
continental bank
17
Union Bank of Nigeria
Plc
Union Bank of Nigeria Plc,
Union Merchant Bank Ltd Broad
bank of Nigeria Ltd and
Universal Trust bank Nigeria
Plc.
18
Unity Bank Plc
Intercity Bank Plc, First
Interstate Bank Plc, Tropical
Commercial Bank Plc,
Center-Point Bank Plc Bank O
Fthe North, New Africa Bank,
Sociate Bankcare, Pacify Bank
And New Nigeria Bank.
19
Wema Bank PLC
Wema Bank PLC and National
Bank of Nigeria LTD
21
Ecobank Ng. Plc
22
Stanbic Bank
23
Standard Charted
bank
24
NIGERIA INTL. bank
25
Guaranty trust bank.
http://articlesng.com/merger-acquisition-nigerian-banks-2007-date/
As earlier pointed out, some of the banks in Nigeria after the deadline of 2005,
was found to be unsound and inefficient. Table 2shows the distressed banks and
the new bank that acquire them.
Table 2
S/No
Distress Bank
New Bank that acquired them.
1.
Afribank plc
Mainstreet Bank Ltd
Equatorial Trust bank
Sterling Bank Plc
First Inland bank
First city Movement Bank
Intercontinental Bank PLC
Access Bank PLC
Oceanic Bank PLC
Ecobank Nigeria PLC
Spring Bank
Enterprise Bank LTD
Platinum Habib Bank
Keystone Bank LTD
Union Bank PLC
Owned by African Capital Alliance Consortium.
Table 3 below, listed the current number of banks in Nigeria, which stood at 21
from the previous 24 after the mergling of stanbic bank and IBTC charted bank
plc. And the restore of Savannah Bank license.
Table 3
S/NO
EXISTING SOUND BANKS
Access Bank Plc
Diamond Bank Plc
Fidelity Bank plc
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First bank plc
First city monument Bank plc
Sky bank plc
Stering Bank plc
United Bank Afica plc
Unity bank plc
10
Wema Bank plc
11
Ecobank plc
12
Zenith bank plc
13
Standard chartered bank
14
Nigeria Intl. Bank
15
Guaranty trust bank
16
Enterprise Bank Ltd
17
Keystone bank ltd
18
Union Bank Plc
19
Mainstreet bank ltd
20
Savannah bank Nig.
21
Stanbic-IBTC Bank Nig. LTD
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MERGER AND ACQUISITION OF NIGERIAN BANKS SUMMARY
AND CONCLUSION
The successful recapitalization of the rescued banks in Sept., 2011 has
significantly engendered economic growth and development as a result of the
soundness, healthiness and stability achieved by the entire system.
With this development, the total number of banks in the country is expected to
reduce from 24 to 20 but with the inclusion of Savannah Bank, which its license
revoked sometimes ago has been lifted and thus, bringing it to 21 banks
presently.
According to the central Bank of Nigeria (CBN), Banks operating in the country
are now sound, from a capital perspective following the exercise the apex bank
revealed that the average capital adequacy ratio (CAR) of all the banks operating
in the country rose significantly to 17.12 percent, after the recapitalization
exercise1.
It also revealed that the average of the lowest capital of all the banks in the
country currently stands around the regions of 10.69 percent while the highest
stands at an average of 41.23 percent.
CONCLUSION
Indeed, mergers and acquisition globally had resulted in more efficient
banking systems, just as an efficient banking system contributes extensively to
higher growth in any country. And in the case of merger and acquisition of
Nigerian banks, Nigeria has benefited tremendously from the move to
consolidate the banks; and the mergers and acquisitions process. Though, the
problem of mergers and acquisition is never underestimated but the advantage so
far is beyond imagination.
Note
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See: This Day Newspaper: Nigeria: new Shape of the Countrys Banking Sector.
12 October 2011.
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10 Comments
aina
Posted February 28, 2014 at 11:54 pm | Permalink
Waoo. Keep it up
Reply
Titilayo
Posted March 4, 2014 at 9:52 am | Permalink
Great Blog.
24/11/2015 13:32
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http://articlesng.com/merger-acquisition-nigerian-banks-2007-date/
Reply
Aishat
Posted March 13, 2014 at 8:54 am | Permalink
its ok
Reply
Obatomi Olorunshola Theophilus
Posted July 28, 2014 at 3:34 am | Permalink
In addition, Access bank plc has now acquired Intercontinental bank plc
_2013.
Reply
Aishat
Posted July 30, 2014 at 9:58 am | Permalink
Nice one, more of it please
Reply
Adelusi Taiwo
Posted January 20, 2015 at 4:34 pm | Permalink
Helo Sir more grease to your elbow,Well done. B4 the 1st merger and acquisition
2004/2005, there was global bank. What was its position after. Tanx
Reply
Awotunbo Adeolu
Posted April 2, 2015 at 5:15 pm | Permalink
very useful
Reply
Yatu Julius
Posted May 26, 2015 at 11:39 pm | Permalink
It Is A Nice And Interesting One. I Found It Helpful To Me, Pls Keep It Up!
Reply
Akinlade Michael Babajide
Posted June 13, 2015 at 7:43 pm | Permalink
pls do u know the recapitalization base of merchant bank in Nigeria (nationally,
regionally),the mode of operation of CBN and who is financing CBN
Reply
MICHAEL JUMBO
Posted June 23, 2015 at 5:24 am | Permalink
I seriously interested in details of the merger acquisation between Ecobank PLC and
Oceanic bank PLC. Do you have access to research work in that direction of further
access to such materials.
Please contact me on 07032792626. Your services will be paid for.
Thank you
Reply
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