FinBank Signs Recapitalisation Agreement with FCMB

Posted by admin Headlines Saturday, July 16th, 2011

The management of FinBank Plc has taken another step in its recapitalisation process, with the signing of a Transaction Implementation Agreement (TIA) with First City Monument Bank (FCMB) Plc for the business combination of both financial institutions. A joint statement issued by the two banks Friday, explained that the business combination will be followed by a scheme of merger to be executed in accordance with the laws of the Federal Republic of Nigeria.

The TIA is a document that defines the relationship between the rescued bank and its potential investors. It also explains how the financial terms in the agreement will be spelt out. The TIA also officially announces the engagements by the parties. At this phase also, the banks will now have to submit the agreement to both the regulators and the shareholders for their approval.

With the agreement, FinBank now becomes the third rescued bank to sign a TIA. Both Intercontinental Bank Plc and Union Bank Plc had earlier signed similar agreement with their preferred investors. Both financial institutions had signed a Memorandum of Understanding (MoU) in May this year.

According to the statement: “The combined bank will be a unique financial institution, with proven corporate banking capabilities, strengthened commercial banking business and a robust platform for retail growth. The merged entity will also benefit from unique complementary transactional banking platforms and offerings, as well as leverage capital, optimise synergies and drive shareholder value.” It quoted the Group Managing Director, FinBank, Mrs. Suzanne Iroche to have said: “We welcome this Strategic investment which will strengthen the financial position of the institution. I am positive the process will bring value to all stakeholders. The development represents a significant milestone in the recapitalization process aimed at restoring confidence to the banking sector.”

On his part, the Group Managing Director of FCMB, Mr Ladi Balogun, was said to have welcomed the deal, saying that the combination would accelerate the attainment of the bank’s strategic and financial goals, whilst also creating a more robust retail platform. With the signing of the TIA, FinBank and FCMB will now commence the process, which will be subject to the approval of the shareholders of both institutions, the CBN, the Securities and Exchange Commission, The Nigerian Stock Exchange and the Federal High Court.wp_posts