Shareholders of First Bank Plc are in upbeat mode with the news that the bank is closer to a deal to buy up Heritage Bank and Polaris Bank.
Final agreements are being made by financial advisers as both banks have been looking for a strong bank to save them from the supervisory hammer of the Central Bank of Nigeria, CBN. The inevitable deal is hinged on an advice by the apex bank, after a round of stress test in banks last year to shape up or lose their licence.
These three entities are vigorously pursuing the merger and acquisition talks across all available means.
Polaris Bank for instance, which is currently under the Asset Management Corporation of Nigeria (AMCON), Hansen up for sale since it became a bridge bank in 2018.
The CBN had stated in October last year that seven commercial banks in the country failed stress test in adequate funding at the end of 2018.
In a financial stability report published by the bank, it was revealed that in less than 30-day period analysis, seven Nigerian banks were not adequately funded, while in the 31-90 days bucket, nine banks had funding gaps.
Overall, the cumulative position for the industry showed an excess of N4.8 trillion assets over liabilities.
The banking regulator, however, did not mention the names of the seven of the banks but it privately informed the affected banks to look into the possibility of merger and acquisition to prevent a total collapse.
A financial experts, are however optimistic that the merger will bring good tidings to the banking industry.21