Sterling Bank’s Chief Financial Officer, Abubakar Suleiman has announced that the bank is looking to buy “one or two mid-sized commercial lenders” following the drop in the value of the naira. According to Reuters the CFO says he expect devaluation to drop by as much as 20% which will impact on the capital adequacy ratio of companies.
This of course means banks will need to raise new capital to meet CBN’s capital adequacy ratio limits and Sterling Bank believes it is in a prime position to pick up some banks. Sterling Bank last January raised about N19 billion in private placements from Silverlake Investments Ltd.
This is not the first time an executive of the ban is mentioning a possible deal with another bank. Sterling Bank last December said it was open to merger or acquisition in order to build up scale and battle the weak market and a deteriorating economy.
According to the CEO Yemi Adeola, the slowdown in the economy along with currency weakness provided opportunities for a market consolidation to build scale and cut costs, adding that one or two foreign banks were having discussions about possible acquisitions in Nigeria.