Banking
Heritage Bank & Enterprise Bank: Acquisition that defied industry standard
On Wednesday 15th of October, financial journalists anxiously awaited a statement or announcement from the Asset Management Corporation of Nigeria (AMCON) concerning the sale of Enterprise Bank to HBCL Investment Services Limited (HISL).
The day marked the end of the deadline for the HISL, promoted by Heritage Bank Company Limited (HBCL), to pay the 80 percent balance of its N56 billion bid price for the acquisition of Enterprise Bank. On September 11th, AMCON had announced the company as the preferred bidder, ahead of Fidelity Bank, which emerged as the reserved bidder).
Upon the announcement HISL, made the first payment of 20 percent as stipulated in the share purchase agreement (SPA).To seal the acquisition, HISL had 15 days to pay N44.8 billion, and there were apprehensions in some quarters that the company may not be able to come up with such money within the required 15 days.
In apparent response to these concerns, Ifie Sekibo, Managing Director/Chief Executive, Heritage Bank, told journalists, “Efforts are ongoing to ensure that the balance of 80 per cent is also paid in line with the terms, conditions and time frame specified by AMCON”.
Heritage Bank MD, Ifie Sekibo
Thus, at the close of business on Wednesday 15th, the question on the mind of industry observers and financial journalists was, “Has Heritage made the payment? The situation became turbo charged by 6.00pm that day, as mixed signals emerged from AMCON and Heritage Bank.
While bank officials who spoke on condition of anonymity and the bank’s PR agency confirmed to journalists that HISL has made the final payment, AMCON’s spokesman, Kayode Lambo told journalists that AMCON is yet to see the money in its account.
This led to a dilemma for financial journalists on what story to write for the next day. While some decided to wait till AMCON confirm the payment, some, decided to write the story based on information from both parties.Thus, the financial industry went to bed, with uncertainty about the Heritage Bank bid to acquire Enterprise Bank.The uncertainty, drama and suspense over the fate of the bid were however brought to an abrupt end 10.30am Thursday October 16, when AMCON released a terse email titled, “AMCON confirms payment for Enterprise Bank”.
The email stated, “We hereby confirm that HBCL Investment Limited has paid the required balance for the purchase of Enterprise Bank.As per the Share Purchase Agreement, the agreed completion phase now commence, this includes seeking all regulatory approvals”.This effectively ended the rigorous and competitive process for the sale of one of the nationalised banks sold to AMCON by the Nigeria Deposit Insurance Corporation (NDIC) in 2011.
From intervention to nationalisationEnterprise Bank was formed to assume the assets of the defunct Spring Bank, a product of the merger of six banks during the 2006 consolidation exercise.The legacy banks were ACB International Bank Plc, Citizens International Bank Plc, Fountain Trust Bank Plc, Guardian Express Bank Plc, Omega Bank Plc, and Trans International Bank Plc.Spring Bank however struggled due to a series of factors, chiefly corporate governance issues, and infighting among majority shareholders of the legacy banks.
Thus, it was severely affected by the impact of the global financial crises of 2008. As a result it was one of the eight banks taken over by the Lamido Sanusi led CBN in 2009, with the appointment of a new board to stabilise and recapitalise the bank.When it was obvious that the bank, alongside Bank PHB and Afribank, would not be able to meet the September 2011 recapitalisation deadline, the CBN revoked their licenses, and handed them over to NDIC.
The Corporation on its part formed Enterprise Bank, Mainstreet Bank and Keystone Bank to assume the assets of the three banks.They were thereafter sold to AMCON, which appointed its own management and injected N680 billion into the banks, with the promise to sell the banks within three years.
The process of selling the banks started in 2012, with the appointment of Renaissance Capital and CitiBank to advise AMCON on what method to adopt in selling the banks. On their part, the advisers recommended that the banks be sold to local and foreign investors.A wild goose chaseWhile this was going on, Mr. Ifie Sekibo and some investors were busy chasing a banking license, to revive the defunct Societe Generale Bank.Their efforts came to fruition February 2013, when the new Bank, Heritage Bank, commenced operations.
Their immediate preoccupation was how to verify and settle depositors of SGBN, gain public acceptance and confidence, with the hope of pursuing their organic growth plan through branch expansion.But they had to battle the intense competition in the industry, and the unprecedented tight monetary policy regime of the CBN, as well as non favourable policies like the gradual removal and reduction of CoT.
The bank however had the luck of the rapid adoption of electronic banking services in the industry and the increased public acceptability courtesy of the cashless policy.According to industry standards, Heritage bank is still at infancy stage. And infants are not expected to attempt what adults do.
Thus few gave the bank any chance to succeed when information emerged that the Bank was among those bidding to acquire Enterprise Bank.Not with the likes of Diamond Bank, Fidelity Bank Standard Chartered Bank, Sterling Bank Plc, Stanbic IBTC Bank Plc contending for the same prize.
With such formidable competitors, the bid by Heritage Bank was dismissed as a wild goose chase.More so, one of its competitors was so determined to win that it employed regional sentiments and political influence of one its shareholders, to win political support for its bid.
This however did not deter the management of Heritage Bank. “We should not shy away from it.We want to make that move because of the strategic fit, because we have been through restructuring and reorganisation of this, and the government and current management of Enterprise Bank in restructuring and putting that organisation together.We don’t want a misfit or a mismatch in that space. And so, we are not shy to say we are fit for it. Sekibo said in response to pessimism about Heritage’s bid for Enterprise Bank.
The challenge aheadAnd that is the next challenge. To prove to stakeholders that Heritage Bank is not a misfit for Enterprise Bank.Interestingly, even before the industry could adjudge its management of making a success revival of the defunct SGBN, Heritage Bank is assuming the daunting and risky task of integrating a bank with rich history of crisis, tainted with unpleasant regulatory intervention.
There would be the inevitable challenge of staff issues, system integration, as well as convincing the customers of Enterprise Bank that the acquisition would bring better services. Thus the wining the bid and raising the money may be the easiest part of the job for the Sekibo led management.
Notwithstanding these challenges, Sekibo expressed confidence of a smooth and successful integration. “ With this take over process going on smoothly, we are sure a more energised bank with improved capacity to create, preserve and transfer wealth will soon emerge ; our shareholders would be happy and customers would be better off for it”, he said.“We would engage the numerous staff of Enterprise Bank.
As you are aware, they are more than us, they have a lot more branches than we do, so, we would need them as they would us.We would work together as a family to achieve a seamless movement from one organisation to a bigger organisation and nobody in that organisation would lose his or her job.All we have is just 15 experience centres; we are talking of an organisation that has over 170 points of service. So, we have no choice, but to work with them,” he added.
Vanguard-
Plans are in top gear for the 11th Annual General Meeting (AGM) of the FBN Holdings Plc.
The management made this disclosure in a notice it filed with the Nigerian Exchange Limited (NGX) on Thursday, where it averred that it has not been served with any court order against the proposed AGM.
According to notice, which was signed by the acting Company Secretary, Adewale Arogundade, FBN Holding said, “The attention of FBN Holdings Plc (the Company) has been drawn to recent media reports purporting that the Company has received a Court Order stopping it from holding the Annual General Meeting (AGM) scheduled for August 15, 2023.
“We confirm that this assertion is a false narrative as the Company has, as at the date hereof, not been served with any court order to stop the forthcoming AGM.
“Suffice to mention that the AGM is a statutory meeting of Shareholders that must be held in accordance with the law, further to which the Company will notify the regulators and the public as appropriate if there is any lawful order to restrain the Company from conducting same.
“We hereby assure our esteemed Shareholders that the AGM shall hold on August 15, 2023, as planned and we look forward to their attendance and active participation at the meeting.”
However, court orders published in national dailies showed that the Federal High Court in Lagos had issued an order against the financial institution, barring it from holding its 11th AGM.
The order was entered pursuant to a petition by Olusegun Onagoruwa, in suit No: FHC/L/CP/1271/2022. It was addressed to the bank and some other bank officials.
It read, “Take notice that unless you obey the directives in the judicial order contained in the order made on July 15, 2022, by the Federal High Court, Lagos, by refraining from proceeding with the 11th Annual General Meeting of FBN Holdings Limited proposed for August 15, 2023, from seeking approval to issue or raise share capital in any manner whatsoever, from appointing or confirming the appointment of new directors, or in any other manner taking any step towards implementing, actualising enforcing resolution of the 10th Annual General Meeting of FBN Holdings Plc held on June 20, 2022, or in any other manner overreaching, disobeying or undermining the said order of a court, you will be guilty of contempt of court and you will be liable to be committed to prison and to there imprisoned.”
Biztellers brought you a report that a segment of shareholders had staged a protest at the headquarters of the bank on Monday, calling for the AGM to be held, as well as soliciting regulatory interventions.
It is expected that at the AGM, FHN Holdings is poised to breathe life into plans to seek shareholders’ approval to raise N150bn fresh capital via a rights issue and elect new directors including billionaire, Femi Otedola and Samson Ariyibi among other resolutions.
The Central Bank of Nigeria (CBN) has refuted claims of devaluing the.
Earlier reports suggested that the CBN had devalued the Naira, lowering its exchange rate from N631 to the dollar, compared to the previous day’s rate of N461.60 at the Importers and Exporters (I&E) window.
However, the Central Bank of Nigeria (CBN) released a statement on Thursday through its Acting Head of Corporate Communications, Dr. Isa Abdulmumin, categorizing the report as false information.
In the statement titled ‘CBN Has Not Devalued The Naira’, he said the attention of the apex bank was drawn to the news report by an Abuja based newspaper edition of June 1, 2023, titled “CB Devalues Naira To 630/51”.
However, the CBN stated categorically that the news report was replete with outright FALSEHOODS and destabilizing innuendos, ‘reflecting potentially willful ignorance of the said medium as to the workings of the Nigerian Foreign Exchange Market.’
“For the avoidance of doubt, the exchange rate at the Investors’ & Exporters (I&E) window traded this morning (June 1, 2023) at N465/USS1 and has been stable around this rate for a while.
“The public is hereby advised to ignore the news report by Daily Trust in its entirety, as it is speculative and calculated at causing panic in the market,” the CBN spokesman added.
He, therefore, advised media practitioners to verify their facts from the Central Bank of Nigeria before publishing in order not to misinform the public.
Biztellers had earlier reported that 139 micro financial institutions, made up of 132 microfinance banks, four primary mortgage banks, and three finance companies fell under the sledgehammer of regulatory authorities with their operating licenses withdrawn.
The Central Bank of Nigeria (CBN) made public the revocation in the official gazette of the Federal Government published on the apex bank’s website on Tuesday.
We now avail you of the names of the affected micro financial institutions, so that you can check if the one you have been doing business with is affected.
Governor, CBN, Godwin Emefiele, explained that the licenses were revoked in the exercise of the powers conferred on the apex bank under Section 12 of BOFIA 2020, Act No. 5.
Biztellers shares below the full list of the affected Microfinance Banks, finance companies and primary mortgage institutions:
S/No. Name Of Institution
1. ATLAS MICROFINANCE BANK
2. BLUEWHALES MICROFINANCE BANK
3. EVEREST MICROFINANCE BANK
4. IGANGAN MICROFINANCE BANK
5. MAINSAIL MICROFINANCE BANK
6. MERIT MICROFINANCE BANK
7. MINNA MICROFINANCE BANK
8. MUSHARAKA MICROFINANCE BANK
9. NOPOV MICROFINANCE BANK
10. OHON MICROFINANCE BANK
11. PREMIUM MICROFINANCE BANK
12. ROYAL MICROFINANCE BANK
13. STATESMAN MICROFINANCE BANK
14. SUISSE MICROFINANCE BANK
15. VIBRANT MICROFINANCE BANK
16. VIRTUE MICROFINANCE BANK
17. ZAMARE MICROFINANCE BANK
18. NORTH CAPITAL MICROFINANCE BANK
19. CHIDERA MICROFINANCE BANK
20. EXCELLENT MICROFINANCE BANK
21. NI’IMA MICROFINANCE BANK
22. COSMOPOLITAN MICROFINANCE BANK
23. PROGRESSIVE LINK MICROFINANCE BANK
24. TRUST ONE (FOMERLY DESMONARCHY)
25. EKUOMBE MICROFINANCE BANK
26. FIRST INDEX MICROFINANCE BANK
27. OLA MICROFINANCE BANK
28. ULI MICROFINANCE BANK
29. VERDANT MICROFINANCE BANK
30. AGULERI MICROFINANCE BANK LIMITED
31. APEKS MICROFINANCE BANK LIMITED
32. FAHIMTA MICROFINANCE BANK LIMITED
33. MANNY MICROFINANCE BANK LIMITED
34. REALITY MICROFINANCE BANK LIMITED
35. SURBPOLITAN MICROFINANCE BANK LIMITED
36. ONYX MICROFINANCE BANK LIMITED
37. OSINA MICROFINANCE BANK LIMITED
38. OLOFIN-OWENA MICROFINANCE BANK LIMITED
39. ZIKADO MICROFINANCE BANK LIMITED
40. PRUDENTIAL CO-OPERATIVE MICROFINANCE BANK LIMITED
41. PENIEL MICROFINANCE BANK LIMITED
42. TARABA MICROFINANCE BANK LIMITED
43. BRASS MICROFINANCE BANK LIMITED
44. MICHIKA MICROFINANCE BANK LIMITED
45. NDIAGU MICROFINANCE BANK LIMITED
46. NORTHBRIDGE MICROFINANCE BANK LIMITED
47. FCT MICROFINANCE BANK LIMITED
48. OMU-ARAN MICROFINANCE BANK LIMITED
49. CHERISH MICROFINANCE BANK LIMITED
50. BIPC MICROFINANCE BANK LIMITED
51. DANELS GLOBAL MICROFINANCE BANK LIMITED
52. BANCORP MICROFINANCE BANK LIMITED
53. MANNA MICROFINANCE BANK LIMITED
54. MONEYWISE MICROFINANCE BANK LIMITED
55. MERCURY MICROFINANCE BANK LIMITED
56. NEW AGE MICROFINANCE BANK LIMITED
57. PEARL MICROFINANCE BANK LIMITED
58. ZAWADI MICROFINANCE BANK LIMITED
59. SEED CAPITAL MICROFINANCE BANK LIMITED
60. EDUEK MICROFINANCE BANK LIMITED
61. EKSU MICROFINANCE BANK LIMITED
62. DAKINGARI MICROFINANCE BANK LIMITED
63. OGOJA MICROFINANCE BANK LIMITED
64. NWABOSI MICROFINANCE BANK LIMITED
65. NUTURE MICROFINANCE BANK LIMITED
66. ACTIVE POINT MICROFINANCE BANK LIMITED
67. AMOYE MICROFINANCE BANK LIMITED
68. BOLUWADURO MICROFINANCE BANK LIMITED
69. IYEDE MICROFINANCE BANK LIMITED
70. MAYFAIR MICROFINANCE BANK LIMITED
71. CALABAR MICROFINANCE BANK LIMITED
72. IGHOMO MICROFINANCE BANK LIMTED
73. HACKMAN MICROFINANCE BANK LIMITED
74. IDESE MICROFINANCE BANK LIMITED
75. BRIDGEWAY MICROFINANCE BANK LIMITED
76. GRASSROOT MICROFINANCE BANK LIMITED
77. SURELIFE MICROFINANCE BANK LIMITED
78. TIJARAH MICROFINANCE BANK LIMITED
79. IC-GLOBAL MICROFINANCE BANK LIMITED
80. EJIAMATU MICROFINANCE BANK LIMITED
81. BRIYTH COVENANT MICROFINANCE BANK LIMITED
82. NANKA MICROFINANCE BANK LIMITED
83. CUB MICROFINANCE BANK LIMITED
84. BFL MICROFINANCE BANK LIMITED
85. UMUNNE MICROFINANCE BANK LIMITED
86. OROKE MICROFINANCE BANK
87. ALKALERI MICROFINANCE BANK LIMITED
88. CROWNED EAGLE MICROFINANCE BANK LIMITED
89. UNIFA MICROFINANCE BANK LIMITED
90. DADINKOWA MICROFINANCE BANK LIMITED
91. IFESOWAPO MICROFINANCE BANK LIMITED
92. OAF MICROFINANCE BANK LIMITED
93. BAMA MICROFINANCE BANK LIMITED
94. NGALA MICROFINANCE BANK LIMITED
95. IWOAMA MICROFINANCE BANK LIMITED
96. KADA MICROFINANCE BANK LIMITED
97. KEFFI MICROFINANCE BANK LIMITED
98. NUT-ENDWELL MICROFINANCE BANK LIMITED
99. FIRST MULTIPLE MICROFINANCE BANK LIMITED
100. SBDC MICROFINANCE BANK LIMITED
101. OROS CAPITAL MICROFINANCE BANK LIMITED
102. OZIZZA MICROFINANCE BANK LIMITED
103. PRIMERA CREDIT MICROFINANCE BANK LIMITED
104. IFEANYICHUKWU MICROFINANCE BANK LIMITED
105. IHIOMA MICROFINANCE BANK LIMITED
106. JOSAD MICROFINANCE BANK LIMITED
107. AKPO MICROFINANCE BANK LIMITED
108. AIYEPE MICROFINANCE BANK LIMITED
109. ABC MICROFINANCE BANK LIMITED
110. STAR MICROFINANCE BANK LIMITED
111. PURPLE MONEY MICROFINANCE BANK LIMITED
112. UTUH MICROFINANCE BANK LIMITED
113. STALLION MICROFINANCE BANK LIMITED
114. KJL MICROFINANCE BANK LIMITED
115. CREDIT AFRIQUE MICROFINANCE BANK LIMITED
116. COWRIES MICROFINANCE BANK LIMITED
117. LAWEBOD MICROFINANCE BANK LIMITED
118. MABINAS MICROFINANCE BANK LIMITED
119. BUSINESS SUPPORT MICROFINANCE BANK LIMITED
120. OGBE-AHIARA MICROFINANCE BANK LIMITED
121. OLOFIN MICROFINANCE BANK LIMITED
122. OBOSI MICROFINANCE BANK LIMITED
123. FIYINFOLU MICROFINANCE BANK LIMITED
124. BISHOPGATE MICROFINANCE BANK LIMITED
125. AWKA MICROFINANCE BANK LIMITED
126. ZIGATE MICROFINANCE BANK LIMITED
127. ESAN MICROFINANCE BANK LIMITED
128. ENUGU-UKWU MICROFINANCE BANK LIMITED
129. ECHO MICROFINANCE BANK LIMITED
130. ALLY MICROFINANCE BANK LIMITED
131. NETWORK MICROFINANCE BANK LIMITED
132. AWGBU MICROFINANCE BANK LIMITED
SCHEDULE II
LIST OF FINANCE COMPANIES LICENCES REVOKED
S/No. Name Of Institution
1. HHL Invest & Trust Limited
2. TFS Finance Limited
3. Treasures & Trust Limited
SCHEDULE III
LIST OF PRIMARY MORTGAGE BANKS LICENCES REVOKED
S/No. Name Of Institution
1. RESORT SAVINGS & LOANS
2. SAFETRUST MORTGAGE BANK
3. ADAMAWA SAVINGS & LOANS
4. KOGI SAVINGS & LOANS
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