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24 investors jostle to buy Enterprise Bank

By on March 21, 2014

At least 24 local and foreign companies are jostling to buy Enterprise Bank Limited after the Asset Management Corporation of Nigeria commenced a process to divest itself of its 100 per cent stake in the bank.

The Chief Executive Officer, Enterprise Bank, Mr. Ahmed Kuru, who made the disclosure, however, said only the consultants appointed by AMCON could determine the number of investors that would end up buying the bank.

Kuru said AMCON’s divestment of its stake in the bank should not be a source of worry as it had been stated from outset that the bad debt manager would eventually divest itself of its holdings in the bank.

The CEO said, “24 investors have shown interest in the bank, with half of them international investors. This is commendable. They have seen the health and quality of our risk assets.”

Kuru explained that his mandate and that of his team when they took over the bank was to run it as a commercial entity and profitably, noting that the bank had become one of the stable banks in the country.

He said, “We have been able to train our people, improve on our processes and change our technology. We inherited people that were not properly trained. And all these we have changed over time through investment in the people, processes and technology.”

According to him, the bank has spent time to build its book, leading to 20 per cent growth year-on-year since it started.

About 60 to 80 per cent of the bank’s revenue base is from lending, said Kuru, who said the remaining 20 per cent was from fees and commissions.

Like most banks in the country, the Enteprise Bank boss said the increase in Cash Reserve Ratio affected the bank as well.

He, however, said the sacrifice was worth it as the development was meant to help bring price stability in the economy.

“Public sector fund for us in the banking sector is cheap money. We can rule out the fact that government fund is key in our economy.  Increase in public sector CRR will affect cash flow. As banks, we have to refocus and change our strategy. The financial inclusion in Nigeria is less than 60 per cent. Banks have gone to the drawing board.”

Kuru, however, said the banks had deployed various products and strategies, which he said had led to growth.

Its 2013 annual statement, according to him, is currently with the CBN awaiting its approval.

Enterprise Bank was among the three rescued banks rescued by the CBN in 2009 during the banking crisis.

AMCON, created in 2010 shortly after the banking crisis to manage the toxic assets in banks, had last year said it would sell the three rescued banks on or before the third quarter of this year.

Besides Enterprise Bank (formerly Spring Bank Plc), the two other banks are Mainstreet Bank Limited (Afribank Plc) and Keystone Bank Limited (Bank PHB Plc).

AMCON is already in the process of selling Enterprise Bank, having last year appointed financial advisers to oversee the transaction.

The Managing Director, AMCON, Mr. Mustapha Chike-Obi, had said the advisers appointed to sell the bank would complete the process by October.

He noted that Mainstreet and Keystone would be sold after Enterprise.

 

[Punch]