BY PETER EGWUATU
Keystone Bank Limited has concluded plans to divest its subsidiaries before the sale of the bank to core investor, even as it returns to profitability.
The bank is divesting its subsidiaries in Uganda, Sierra Leone and Liberia because of the bad loans on their books
Managing Director, Keystone Bank Limited, Mr. Philip Ikeazor, revealed this to newsmen in Lagos, saying “ We don’t have N50 billion in the head office to maintain subsidiaries as required by the Central Bank of Nigeria, CBN. So we have to divest to maintain our core business which we have the capital requirement.”
Ikeazor stated that Asset Management Corporation of Nigeria, AMCON plans to begin the sale of Keystone Bank before the end of the year after new owners take over Mainstreet Bank and Enterprise Bank. Before the core investor comes in we would be divesting from insurance healthcare unit, and other non-core businesses.
Continuing, the Keystone Bank boss said, “We are targeting an increase of about 15 per cent growth in loan book this year. We intend to achieve this by aggressive customer acquisition and loyalty programme, use of technology via Point of Sale, POS Terminal, Debit and Credit cards, internet banking etc.
We already have 2000 customers, 229 locations and 384 POS. The core bank has returned to profitability, while we are planning to diversify from non banking core and African subsidiaries which is currently impacting negatively on the group performance.”
While commenting on the financials, Ikeazor stated “ The bank’s gross earnings grew by 3 per cent from N40.2 billion in 2012 to N41.5 billion in 2013. A testimonial to the improved operational activities is the increase on risk assets by 28 per cent.
The bank’s deposit liabilities increased by 13 per cent from N267 billion in December 2012 to N301billion in December 2013. This indicates an increased market share and improved customer service. Loans to deposit ratio is 22 per cent while industry average is 65 per cent. “
It will be recalled that the CBN fired the Chief Executives Officers ,CEOs of eight of the country’s lenders and bailed them out with 620 billion naira ($3.8 billion) after a debt crisis caused by loans to stock speculators and fuel importers threatened the industry in 2008 and 2009.
The government set up Asset Management Corp. of Nigeria to take over Keystone Bank, Mainstreet Bank, and Enterprise Bank in August 2011 after regulators deemed them unable to meet requirements for banking.