FinBank and First City Monument Bank have signed a Memorandum of Understanding (MoU) authorising them to exist as one business entity. The signing of the MoU is a major boost that will help FinBank achieve its recapitalization bid. The bank said in a statement that the exercise follows a transparent and competitive process under the supervision of Board of Directors of FinBank with a commitment to reposition the bank. "The Signing of the MoU follows a transparent and competitive process under the direction and guidance of the Board of Directors of FinBank which remains committed to the long-term future of the bank," a statement from FinBank Management said.
The merger of both institutions, it was learnt, will provide significant protection for shareholders and other stakeholders of both institutions as well as promote franchise value.
The bank said the exercise will guaranty its existence as a going concern, and reposition it as a leader in the industry. "The business combination of the two institutions will create a strong financial institution which will be a major player in the Nigerian financial services industry," the bank said.
It is also expected that such merger will enhance both institution’s liquidity, capital adequacy, strong corporate governance and a broader branch network to enable it compete effectively in the market.
The bank admitted that the exercise has to be approved by the FinBank’s shareholders, Central Bank of Nigeria, the Securities and Exchange Commission, The Nigerian Stock Exchange and the Federal High Court.
In recent months, three banks have taken steps crucial to their recapitalization.
Union Bank recently signed an agreement with African Capital Alliance Consortium (ACA Consortium) where the later is expected to invest $750 million into the former. This was followed with the signing of MoU between Access Bank and Intercontinental Bank in April. By that exercise, the new merging banks will become one of the top three players in Nigeria’s financial sector. The new bank will likely be ranked first in branch network, third in deposit volume, fourth in savings deposits, top four in total assets and market value among other indexes.
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