By Amaka Abayomi
The Management of Spring Bank Plc has said that the recapitalisation process of the bank is on course.
According to a statement from the bank, Spring Bank is currently engaged in advanced discussions with four strong investment contenders some of whom are the second largest bank in India, ICICI; United States based Cloudleap Partners LCC; CARAM Capital and a couple of others.
The discussions, the statement further said, recently stepped in to higher gear and have seen the bank and its financial advisers working assiduously to ensure a smooth and successful transaction that will produce a preffered partner acceptable to all stakeholders of the bank.
The bank, which sustained a steady positive growth performance for the last 18 months having posted a profit for the first time in its six-year existence, had remained quiet on the details of its recapitalization while ensuring careful assessment of each investor.
The statement said: “as much as we are interested in the prompt conclusion of arrangements in this direction, we are also keen on getting the best deal there is, which necessitated taking our time and being very cautious.
“For us, it is not just how fast but how well we end it within the given timeline.
“It is sufficed to say that we are on course with our recapitalization bid and we shall conclude the exercise timely.”
For the first time in its six-year history, Spring Bank Plc, one of the eight banks rescued by the Central Bank of Nigeria (CBN), has posted a profit in its operations.
The 2010 audited accounts, released at the floor of the Nigerian Stock Exchange (NSE), indicated that the bank posted a profit-before-tax of N6.2 billion.
This is an outstanding performance when compared to the losses of the previous years.
This sterling improvement contrasted with the loss of N28.7billion for the period ended December 31, 2009.
The development represents a turn-around for the bank under the management of the Group Managing Director/CEO, Mrs. Sola Ayodele.
In the 2010 first quarter unaudited results, the bank recorded a profit-before-tax of N636 million.
The trend, which has been sustained, has also received commendation from industry watchers, and attracted the keen interest of equity investors as well as other stakeholders of the bank.
A cursory look at the results, indicated that the bank made a profit-after-tax of N6.1 billion, while deposits grew from N142.7 billion in 2009 to N198.6 billion in 2010, representing an increase of 38 per cent.
Also, the balance sheet size rose from N146.3 billion in 2009, to N197.1 billion, in the review period, indicating a leap of 34 per cent.
The positive turn of events in the bank which is also the result of a sharpened business focus and a more cost-efficient operation, is expected to confer negotiation advantages to Spring Bank in the advanced on-going recapitalisation discussions with a number of foreign and local investors.
Commenting on the performance of the bank, the GMD/CEO stated that the result is a fulfillment of the promise she made to the regulatory authorities, shareholders, customers and staff of the bank about 20 months ago when she assumed its mantle of leadership.
She said that the launch of Spring Bank on the path of profitability has been made possible by the deployment of a number of strategic initiatives, which focused on effective liquidity management, loan recovery, operational efficiency and corporate governance in addition to the intervention funds received from the apex bank at the onset.