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The
Central Bank of Nigeria (CBN) has said that so far, it is has not
granted any approval for any bank to sign Memorandum of Understanding
(MoU).

The
regulator, in a statement by its spokesperson, Mohammed Abdullahi,
expressed displeasure over speculations and comments on the proposed
mergers and acquisitions of rescued banks.

The clarification is coming just as Access Bank and Intercontinental Bank announced the signing of an MoU at the weekend.

While
welcoming the trend of ongoing negotiations among various parties and
some rescued banks, the CBN stated that MOUs can only lead to actual
transaction if and when CBN issues no objection and other regulatory
approvals.

“The
CBN and other regulators will ensure that all relevant factors,
including professional advice from the financial advisers, are
adequately considered before any approval is granted,” the statement
added.

Apex bank not involved

The
CBN rebuttal may not be unconnected to insinuations that the regulator
is influencing the whole procedure in favour of some interested parties.

“The
process, which is being driven by the parties involved and not the CBN,
will have to be approved by the board and shareholders of the banks
concerned. Therefore, all speculations and unsavoury comments on the
process are premature and unnecessary,” the Central Bank stated.

Intercontinental
Bank became the third rescued financial institution to make significant
progress in the search of a new core investor, with the signing of a
“business combination” agreement with Access Bank.

A
joint statement by both institutions at the weekend stated that the two
have signed a MOU for the purpose of “business combination that would
create one of Africa’s largest financial institutions.”

The
agreement, which puts to rest several weeks of speculation, follows the
completion of a competitive, rigorous, and transparent selection
process and the approval of the board of directors of both banks.

Milestones will be reached

Sunday
Ekwochi, company secretary of Access Bank, said the details of the
merger, which could take as much as 24 months, was still being worked
out.

“During
this period, milestones will be reached and as we go along, we will
unfold the details. The MoU is an indication that both parties are
prepared to work together,” he said on telephone, when asked about the
amount and the equity stake that is involved in the transaction.

Last
week, Union Bank announced a memorandum of agreement with Africa
Capital Alliance for the injection of over N112 billion ($750 million)
into the rescued 94-year old financial institution. It said the deal,
with its new core investor, would provide a framework for the process by
which the bank will be recapitalised.

“However,
the entire process will be subject to the approval of the bank’s
shareholders, the Central Bank of Nigeria (CBN), the Securities and
Exchange Commission, the Nigerian Stock Exchange, and the Federal High
Court,” it said in a statement.

Afribank,
another rescued bank, a fortnight ago announced the emergence of Vine
Capital as its new preferred core investor with which it is still
negotiating. The other rescued banks, Oceanic Bank, Bank PHB, Spring
Bank, Finbank, and Equitorial Trust Bank are yet to announce appreciable
success.

Aggrieved
shareholders of Bank PHB last week secured a court injunction against
the planned sale of the bank to Habib Bank of Pakistan.

In
all, the CBN said it and other relevant regulators will be guided by
appropriate considerations including due diligence on investors and the
advice provided by financial advisers to the parties before approving
MOUs and other subsequent transactions.