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Keystone Bank to sell African subsidiaries

By BusinessNews Staff on July 26, 2014

Keystone Bank Limited yesterday disclosed plans to sell its subsidiaries in three African countries due to capitalisation challenges confronting the institutions.

The countries are Uganda, Sierra Leone and Liberia.

The Managing Director/Chief Executive Officer, Keystone Bank, Mr. Philip Ikeazor said this during a media parley with journalists in Lagos.
According to him, Keystone Bank did not have capital to run the institution prior to when it acquired the institutions.

Ikeazor noted that the poor performance recorded by the African subsidiaries cannot be supported by the parent company.

Keystone Bank is wholly owned by the Asset Management Corporation of Nigeria (AMCON). It was created through the bridge bank process and from the carcass of the defunct Bank PHB. However, AMCON is in the process of divesting its ownership of the financial institution.

Continuing, the Keystone Boss said: “As you are aware, we had African subsidiaries which we had not had capital to run prior to when we took over the institution and those subsidiaries on their own had several challenges, including capitalisation issues.
“While the parent company itself was required to recapitalise, we didn’t have capital to put in the subsidiaries so they were not performing very well. So the strategy is to divest because basically we have to focus on our core business in our main country.”

Ikeazor pointed out that Keystone Bank has returned back to profitability.
He said in line with the move by AMCON to divest its ownership of the bank, his team is assiduously working towards making the institution attractive viable buyers.
According to him, Keystone Bank has increased its footprint in terms of technology.

He said the bank has increased the number of its ATMs and has also grown its card and internet banking business.
“We have also upgraded our contact centres. If you call our contact centres, they would take your issues in five different Nigerian languages and you would have a much faster response time. So we have done a lot to focus very strongly on customer service.

“Currently we have about 199 branches. We are growing and we have strategy to double the point of sales that we have. We have over two million customers at the moment and a staff strength of 4,700,” he added.
Currently, Keystone Bank’s shareholders’ funds is in excess of N38 billion, but below the N50 billion required to have an international banking licence in Nigeria.

The bank also has insurance and healthcare subsidiaries.

The bank’s gross earnings grew from N40.2 billion in 2012 to N41.5 billion in 2013, he said, adding that its cost saving measures have resulted in a reduction in its operating expenses.

“On the balance sheet size, you can see that we have grown our deposit liabilities, which is basically a mark of confidence that the bank is growing and making profit,” he added.

[This Day]

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