Merger and Acquisition Interest on Nigerian Banks by Foreign Banks Likely to Happen

Plans by Nigeria’s central bank to lift the cap on foreign ownership of banks and to encourage mergers and acquisitions will spur interest in the banking system, UBA Capital Research said.

“Speculating on which individual banks could be targets for foreign banks is of limited value, but we do believe that it is likely that banks in the mid-tier segment will attract attention,” said UBA Capital, the brokerage unit of Lagos-based United Bank for Africa Plc. It reiterated its buy recommendations on Access Bank Nigeria Plc, Diamond Bank Plc, First City Monument Bank Plc and GTBank.

Central bank Governor Lamido Sanusi, in his first interview since his appointment on June 3, told the Financial Times of London that he expected a further consolidation in the Nigerian banking industry to bring down the number of banks to about 15 from 24.

FURTHER GUIDELINES ON THE OPERATIONS OF THE FOREIGN EXCHANGE MARKET

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Nigeria will stabilize the naira following tumble, Soludo says

Nigeria will stabilize the naira without squandering its more than $50 billion of foreign reserves after the currency fell about 20 percent against the dollar, said central bank Governor Chukwuma Soludo.

Policy makers have a “flexible” exchange-rate policy, Soludo said in a Bloomberg Television interview. Currency-trading restrictions imposed last week are “temporary,” designed to prevent the central bank from running down international reserves as Russia has done to support the ruble.

The naira began tumbling as oil, which accounts for 90 percent of Nigeria’s export earnings, started its 74 percent drop from a record in July. The central bank banned interbank trading in the currency last week, spurring the resurgence of an unregulated market where the naira’s exchange rate is about 6.5 percent weaker than the central bank’s target rate.

Africa’s biggest oil producer and the fifth-largest supplier of crude to the U.S. has enough reserves to meet all its foreign- debt obligations “even for years,” Soludo said.

Foreign-currency reserves fell 5.7 percent to $58.4 billion from $61.9 billion a month earlier, the central bank said on Nov. 7. As of Jan. 22, reserves dropped to $50.9 billion as the central bank stepped in to buy naira after it reached a record low of 161.2 per dollar in interbank trading on Jan. 13.

Liberia’s First Microfinance Institution Starts Operations with IFC’s Support

Liberia’s first commercial microfinance bank has received a banking license and is making loans to the public, boosting the country’s economy by providing finance to its smallest businesses, many of which have had no access to financial services.

IFC is a founding shareholder in AccessBank Liberia, which received a preliminary banking license from Liberia’s central bank.

IFC has supported AccessBank Liberia through every stage of its development. AccessBank Liberia looks forward to a continued partnership with IFC to increase financial services to Liberia’s smallest entrepreneurs and help support the country’s economic development.

AccessBank Liberia is the result of a two-year partnership between IFC and Liberia’s government. IFC initially worked with partners at Liberia’s Central Bank, the International Monetary Fund, and within the World Bank Group to build a regulatory framework based on global best practices in microfinance. IFC will continue to work with Liberia’s central bank to strengthen its capacity to supervise microfinance lending.

The successful launch of AccessBank Liberia demonstrates IFC’s commitment to Liberia and strong belief in the potential of the country’s private sector. IFC Africa strategy involve supporting Africa’s smallest businesses and entrepreneurs by helping to extend financial services to people and places where they are most needed.

AccessBank Liberia was established in partnership with Access Holding. IFC previously worked with Access Holding to establish successful microfinance banks in Madagascar and Tanzania. The European Investment Bank and the African Development Bank are also shareholders in the new institution.

Unleashing ideas with venture capital

There are many Nigerians with fantastic ideas that require capital to start or grow their existing businesses. Accessing the needed money from banks or other financial institutions is usually difficult not because all the ideas lack credit but there are certain factors that the lenders contend with it. In addition to funds, many people with ideas also need a partner to work with.

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