First Bank To Acquire Heritage Bank, Polaris Bank

A source privy to the merger informed reporters that both Polaris and Heritage have been looking for a worthy bank to do busi­ness with as they have been told by the apex bank, the Cen­tral Bank of Nigeria (CBN), after a round of stress test in banks last year to shape up or lose their licence.

The source also informed that these three entities are vigorously pursuing the merger and acquisition talks across all available means.

It was gathered that Polaris Bank, for­merly Skye Bank, for instance, which is currently under the Asset Management Corpora­tion of Nigeria (AMCON), is 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 expert, Tola Odukoya, Chief Executive Of­ficer, FSL Asset Management Limited, said the merger will bring good tidings to the bank­ing industry.

He Said:

“It will lead to fresh consolidation exercise in the banking industry. You know that Polaris is current­ly under the Central Bank of Nigeria, I mean it is an AMCON bank. We were made to understand last year by the CBN that it may call for recap­italisation of some banks”. ­

He added that a merger be­tween these three banks will probably birth the biggest bank in the country.

“You know we have more banks than we used to have before with the issuance of banking licence to some mer­chant banks and regional banks.

“Within this our current economic situation one may ask what are these banks do­ing? Are they providing bank­ing services to the people? Are they offering proper banking intermediation?

“To that extent, the merger to me is welcomed. I am of the opinion that it is better to have 10 percent in a big bank than to have 100 percent in a bank that is drowning.