South Africa’s FirstRand Gets Nigeria Merchant-Banking License

Sizwe Nxasana, CEO of First Rand Bank

FirstRand, South Africa’s second-biggest financial company, obtained a license to run a merchant bank in Nigeria, sub-Saharan Africa’s second-biggest economy.

“The bank was granted a license after it met the 15 billion naira ($95.2 million) minimum capital requirement and other conditions,” Ugochukwu Okoroafor, a spokesman for the Abuja-based Central Bank of Nigeria, said by phone from the capital, Abuja. FirstRand is expected to commence business early next year, he said.

Nigeria’s central bank introduced modified licensing rules for lenders as part of reforms after a debt crisis in 2009 brought the industry to the verge of collapse. Banks are either licensed as holding companies operating local and international units or as national, regional or specialized banks. First Securities Discount House Ltd., based in Lagos, said on Nov. 23 it received a merchant-banking license, bringing to two the number of such permits given by the central bank.

The license will enable FirstRand’s unit, Rand Merchant Bank,which already has an office inNigeria “to more rapidly build out its franchise, provide products and services to the corporate and institutional client segments,” RMB’s Chief Executive Officer Alan Pullinger said today in an e-mailed statement.

FirstRand once tried to buy Nigeria’s Sterling Bank Plc, walking away after a price couldn’t be agreed.

Source: Bloomberg