Nigeria-based First
City Monument Bank (FCMB) is going to undertake recapitalisation of
and merge with national bailed-out rival Finbank.

The merger has now
been confirmed by FCMB, following news in January FCMB had made a bid
for 182-branch strong Finbank.

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The merger between
FCMB, which has 133 branches across Nigeria, and Finbank is
part of FCMB’s ambitions to grow its retail banking franchise as
the bank operates predominantly as a wholesale bank.

FCMB said that the
merger would create a “significant player in the Nigerian banking
industry”, offering a complete suite of banking services.

The general managing director and CEO of FCMB,
Ladi Balogun said that Finbank enhanced FCMB’s market reach through
additional capabilities such as its mobile and electronic banking
platforms, which Balogun said were “remarkably effective”.

 

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Bailed-out lender to help FCMB grow
retail business

He added: “This transaction is consistent with
FCMB’s strategic objectives and has a compelling rationale from a
risk and financial perspective.

“Strategically, it allows us to strengthen our
commercial banking business and develop a more robust platform for
retail growth.

Finbank was one of
the nine Nigerian banks to receive a state bail-out in
2009.

FCMB’s retail unit remains in the red although
losses narrowed for the nine months to 30 September to NGN5.3bn
($34.2m) from NGN6.0bn in the previous year.

FCMB said it expected the new merged entity to
“enable the realisation of synergies which will further drive the
profitability of the bank.”