By Michael Eboh
LAGOS — First City Monument Bank, FCMB, Plc and International Finance Corporation,IFC, have entered into a strategic partnership with the aim of acquiring one of the distressed banks in Nigeria.
The IFC, a member of the World Bank Group, also announced an investment of N10.5 billion ($70 million) in FCMB to support the bank’s growth strategy, including its plan to acquire one of the distressed banks.
According to a statement by the spokesperson for the bank, Mr. Remigius Njoku, the investment will help the bank in its drive towards the financing of small and medium enterprises among other numerous growth strategy.
He noted that IFC’s investment would consist of a long-term senior loan of $50 million and a convertible loan of $20 million.
He said: “First City Monument Bank and IFC also signed a cooperation agreement outlining areas for future partnership. They include acquisition finance of a distressed bank, co-financing on infrastructure projects, potential co_investment in an infrastructure project development investment company, and partnership in introducing new classes of assets to the pension industry.”
He explained that IFC’s investment in FCMB was expected to improve access to long-term credit, particularly among Nigerian companies focussed on agricbusiness and education.
He added that both sectors were important to Nigeria’s economy, and included many small and medium-sized businesses that would benefit from increased access to finance.
Mr. Ladi Balogun, Group Managing Director, First City Monument Bank, also added, “This partnership with IFC will help FCMB achieve our strategic growth objectives. We view IFC’s investment as a stamp of approval on our strategy and commitment to good corporate governance and risk management.”
Also speaking, Solomon Adegbie_Quaynor, IFC’s Country Manager for Nigeria, said, “IFC is committed to supporting the full recovery of Nigeria’s banking system, and our investment in First City Monument Bank reflects this strategy.
“IFC is particularly well positioned to support growth by well_managed banks and the expansion of their SME lending business.”
“This transaction is part of IFC’s ongoing strategy to support the banking sector in Nigeria and across emerging markets in the aftermath of recent market turmoil by: Providing long term financing to help well managed banks achieve growth objectives and improving their reach to underserved segments, such as infrastructure and SMEs.
“Helping partner banks improve corporate governance, risk management, and in developing robust environmental and social monitoring systems and supporting the recapitalization efforts of distressed banks”