The managing director, Asset Management Corporation of Nigeria (AMCON), Mr Mustafa Chike-Obi, at the weekend offered insights on the decision of the corporation to start the sale of its three banks – Enterprise Bank, Keystone Bank and Mainstreet Bank, describing the step as the best way forward for a successful divestment programme.
AMCON recently announced the beginning of the final process for the sale of its wholly-owned bridge banks, indicating it would start with the sale of Enterprise Bank and then followed by the other two – Keystone and Mainstreet Banks. AMCON expects to complete the sale of the three banks by September 2014.
Chike-Obi said Enterprise Bank was the smallest in terms of size and cleanest of the three banks and thus makes a good starting point in terms of attractiveness to investors and less probability of complications in the complex transaction process.
According to him, while the clean structure of the bank would entice investors and motivate strong rallying start for the entire divestment transactions, its size presents it as a learning curve for AMCON to guard against possible mistakes in the sale of the other two.
He said that there were more than 20 bidders that have indicated interests in the purchase of Enterprise Bank, which not only underscored the attractiveness of the bank but vindicated the decision of the corporation to start with the bank.
He noted that the existence of several expressions of interests provides for competitive valuation and would enable the corporation to achieve the best bargain in the disposal process.
“In a complex transaction like the sale of a bank, you have to take it from the less complicated so that it will serve as learning point to correct any unintended consequences. This will provide you with the opportunity to avoid such mistakes when you are handling bigger and much more complex transactions,†Chike-Obi said.
He said all the three banks have been fully restructured and stabilised for growth, adding that the large sizes, spread and structures of Keystone Bank and Mainstreet Bank have also been the main attractions for bidders looking for big impact and wider entry strategy like FirstRand.
Latest audited report and accounts of Enterprise Bank for the year ended December 31, 2012, showed remarkable growths across key performance indicators as the bank rebounded from a five-month loss of N5.2 billion in 2011, with a profit before tax of N11.3 billion in 2012. Enterprise Bank was incorporated and commenced operations immediately in August 2011, to take over the assets and liabilities of the defunct Spring Bank Plc. The report showed that gross earnings increased significantly to N40.4 billion in 2012, as against N10.5 billion recorded in 2011.
Deposit base rose from N162.6billion to N208.4 billion, while total assets increased from N198.5billion to N261.1 billion.
Source: Leadership (by Isaac Aimurie)
