Merger to Create W. Africa's Biggest Bank
From Reuters
LAGOS, Jan 18 (Reuters) - Nigerian banks United Bank of Africa and Standard Trust Bank said on Tuesday they had agreed plans to merge in a move aimed at creating the biggest bank in the West African region.
The deal is in line with a central bank directive designed to consolidate the crowded and fragmented financial sector.
"The boards of UBA and Standard Trust Bank PLC, at separate meetings yesterday, approved arrangements to merge both institutions," STB said in a statement posted on its Web site.
The statement said the merger would "create the No.1 bank in West Africa and one of the largest banks in Africa" but no financial details were immediately available.
The companies said they would hold a news conference in Lagos on Wednesday.
The announcement boosted UBA shares on the Lagos bourse to 10 naira each from 9.81 naira on Monday while STB was unchanged at 7.41 naira because trading had already been suspended, brokers said.
UBA was founded in 1961 and is Nigeria's third biggest bank in terms of branches. But the bank which has over 250 branches nationwide has been overtaken in terms of profitability by younger enterprises such as the 14-year-old STB.
STB, only listed on the Nigerian Stock Exchange last year, is ranked 14th by market capitalisation with its shares currently valued at 44.46 billion naira, while UBA has declined to 20th position with a value of 27 billion naira.
So far about a dozen operators have successfully approached the stock market to raise funds to beat the deadline and a number of share sales are planned for this year.
Both STB and UBA were expected to easily comply with the order by seeking extra cash from the bourse but it was not immediately known if the share issues would proceed.
STB is 100 percent Nigerian owned but UBA has some foreign investors.
Nigerian shareholders hold 58 percent of the bank while U.S.-based Bankers International Corp has 4.5 percent, and Banca Nazionale del Lavoro and Monte del Paschi di Siena of Italy have 2.4 percent stake each.
The remaining 32.8 percent is held via Global Depository Receipts (GDR) listed on the New York Stock Exchange.
It also has two offshore offices in New York and Grand Cayman.
Jan. 19, 2004