•We can only hope useful lessons have been learnt from past mistakes
It was a replay, somewhat, of the fabled phoenix mythology – a bird said to have arisen from the ashes of its predecessor. Thursday last week, the Asset Management Corporation of Nigeria (AMCON) announced the Heritage Bank-sponsored HISL Investment Services Limited as preferred bidder for Enterprise Bank, one of the three bridge banks created after the 2009 banking crisis. Heritage Bank is the regional bank which arose from the ashes of the defunct Societe Generale Bank of Nigeria after acquisition by IEI Plc from the Central Bank of Nigeria (CBN) in 2012.
The statement by AMCON’s Head, Corporate Communications, Kayode Lambo, read: “The Asset Management Corporation of Nigeria is pleased to announce HISL Investment Services Limited as preferred bidder and Fidelity Bank Plc as reserve bidder for the acquisition of the entire issued and fully paid up ordinary shares of Enterprise Bank Limited. This follows the receipt of the approval of the Board of Directors of AMCON. HISL is sponsored by Heritage Banking Company Limited.”
The deal is however subject to its payment of its winning bid of N56 billion. Under the terms of the Share Purchase Agreement (SPA), HISL was expected to have paid 20 per cent or N11.2 billion of the bid price last Friday – September 21, after the execution of the agreement.
The balance of 80 per cent or N44.8 billion is due by October 13.
Seen in the context of AMCON’s attempt to bring closure to the 2009 sanitisation of the financial services sector, particularly the three bridge banks which it gave rise to, the development represents a milestone of sorts. Presently, AMCON is reportedly set to announce the preferred bidder for Mainstreet Bank on or before October 31; the sale of Keystone Bank is expected to commence later. More fundamental is the implication of the development to the winding down process of the child of necesity called AMCON. Only two weeks ago, the corporation also took another step in this regard when it sold its 12.5 percent stake in Ecobank to Qatar National Bank (QNB) for a princely $200 million.
Having said that, Nigerians are obviously entitled to wonder if the arrangement is not another familiar corporate-Nigeria story of the small fish swallowing the big – the sort of changes that throw up far more complex questions than the solutions could hope to resolve. We hope, if only for the sake of the Nigerian banking public, that the process ends as expected.
No doubt, it says a lot about the ambitions of the regional bank that it is taking over a behemoth with over 160 branches across major cities and commercial centres, and one with over 177 Automated Teller Machines, 57 cash centres and 2,000 Point of Sale terminals. (We saw this once when Access Bank acquired the obviously bigger but now defunct, Intercontinental Bank). At this point, we can only hope that appropriate lessons have been learnt from the set of factors which birthed in the take-over. It is also our expectation that the regulator in particular and players will be up and doing to bring the process to a speedy conclusion.
It should be realised however that a changing landscape of banking means nothing if it does not deliver on the ultimate objectives of financial inclusion and service delivery. Years of financial sector reforms seem to us as sufficient to deliver on those promises. Hopefully, the take-over of Enterprise Bank by Heritage should provide some fillip.
