FirstRand Limited, South Africa’s second-largest bank, has said it needs to buy a retail and commercial bank in Nigeria to support its investment bank and win access to consumer deposits for corporate funding.

The Chief Executive Officer, First Rand Merchant Bank, Mr. Alan Pullinger, said on Friday, “We can run the bank as a merchant bank for a short term, but in the long term we want to get into retail and commercial banking. To continue lending to companies, it needs to have access to deposits.”

Also speaking, a director in FirstRand was quoted by Bloomberg as saying, “We are exploring various options in Nigeria, including the assets, which form part of the Asset Management Corporation of Nigeria.”

The nationalised banks are Keystone Bank Limited, Mainstreet Bank Limited and Enterprise Bank.

AMCON had earlier said that it would announce 11 financial advisers that had been shortlisted to help with the selling of the three nationalised banks that were bridged by the Nigeria Deposit Insurance Corporation last year.

The Managing Director, AMCON, Mr. Mustafa Chike Obi, said, “We are now in the process of evaluating what the nationalised banks are worth. We received 44 Expressions of Interest from different advisers, but we shortlisted 11 entries that will soon get requests for proposals. So, in the next four to six weeks from now AMCON will announce the advisors for nationalised banks.

The CBN last month granted merchant banking licence to FirstRand and First Discount House Limited, saying the nation’s external reserves had risen further to $46bn.

The Director of Corporate Affairs, CBN, Mr. Ugo Okoroafor, said that the licensing was in line with CBN’s new banking model, saying, “the banks have met the minimum capital base for merchant banking which is N15bn.

He said, “FirstRand is partnering with a local firm and will commence operation early next year with a capital base of N16bn while FSDH will cease operations as a discount house, and now function as merchant bank.”

FirstRand had said in August that it agreed to buy a 75 per cent stake in Merchant Bank Ghana Limited for $86m to strengthen its position in Africa after earlier this year ending talks to purchase Lagos-based Sterling Bank Plc.

The investment-banking unit has 12 people in its Nigerian office and plans to expand its workforce in Nigeria to about 20, Pullinger added.

Source: Punch (written by Ademola Alawiye)

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