First Bank, UBA plan $500 million bond each

LAGOS-Nigeria’s First Bank  has appointed Goldman Sachs and Citi Bank  to manage the sale of a $500 million Eurobond planned for later in the year, its chief financial officer  has announced.
Speaking at the Reuters Africa Investment Summit in Lagos, Bayo Adelabu said the new bond would replace a $175 million Eurobond, which it retired last month.
“We’ve appointed advisers for the bond – Goldman Sachs and Citibank – to launch the $500 billion Eurobond,” Adelabu told Reuters in an interview.
Nigeria in 2011 issued a $500 million 10-year Eurobond, which set a sovereign benchmark in international capital markets and prompted corporate issuers to follow suit.
United Bank of Africa, UBA also plans to issue a $500 million Eurobond in the final quarter of this year or early next year to finance its foreign currency assets and expansion in Africa.
Nigerian lenders were hit by a financial crisis in 2008 that nearly bankrupted nine of them before a $4 billion bailout. First Bank was not among those that needed rescuing.
Recovery since then has been rocky, with most banks reporting losses or profit declines for 2011.
First Bank bucked the trend, posting a 48 percent jump in 2011 full year pretax profits to 50.06 billion naira ($318 million) on Tuesday.
Adelabu said the lender had started to pursue a pan-African strategy, with a 75 percent acquisition of BIC Bank in the Democratic Republic of Congo last year, and was in the talks to acquire a bank in a major west African country, which he declined to name.
He said the bank had identified 10 countries in Africa where it would want to expand its footprint.
“What we are doing is to acquire one or two (per country) and see how much they can contribute to the group,” he said, adding that the bank would expand outside Nigeria only through acquisitions, not greenfield start-ups.
Nigeria’s biggest bank by assets plans to increase its loan book by 10 percent in 2012, targeting sectors within the oil and gas, infrastructure and agriculture sectors, he said. Adelabu expected returns on equity of around 16-18 percent in 2012.
First Bank had 1.2 trillion naira in loans in 2011, 2.6 percent of them non-performing, he said, compared with 7.8 percent in 2010.
Adelabu said there was a large retail population in Nigeria to which his bank was looking to extend loans, but it was still assessing the risks, particularly for low-income customers.
The bank plans to add 120 new branches to its existing 630 this year and add 500,000 new customers to reach 6 million in 2012, he said.

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