FirstRand Launch Merchant Banking In Nigeria

South Africa’s number two lender, FirstRand, on Thursday, launched its new merchant banking business, Rand Merchant Bank (RMB) Nigeria, as a launch pad to move into retail and commercial lending in Africa's most populous nation.

The JSE-listed group was granted an investment banking licence in November, last year. It had been looking for an opportunity to pitch its tent in Africa’s second largest economy financial market since 2009, when the CBN invited bids for healthy and distressed banks after its intervention.

In 2011, it ended talks to buy a majority stake in Nigeria's Sterling Bank after both parties failed to agree on a price. 

                                      

Now, with the launching of RMB Nigeria,  First Rand wants to expand its operations in the country, organically or through an acquisition.

Through RMB, FirstRand is determined to become a major player in Nigeria.

"We are looking at having a universal banking operation in Nigeria ... growing on the back of our investment banking operations into the retail and commercial banking," First Rand Chief Executive Sizwe Nxasana said.

"Our appetite for Nigeria is growing and we are going to be looking at opportunities that will put us in a position where we are becoming a seeded player ... in other words among the top five banks in Nigeria in the next few years."

Nxasana says FirstRand is still interested in acquiring one of the three banks, Mainstreet Bank, Keystone Bank and Enterprise Bank that were nationalised two years ago, but could also enter retail operations on its own.

FirstRand in November had said it could spend more than $300 million to buy a retail and commercial bank in Nigeria.

Although it began operating a representative office in Nigeria in 2010, FirstRand is following in the footsteps of its SA rival, Standard Bank, who already has one of the largest banking operations in Nigeria.

“This move is consistent with our strategy, as we often enter a new market through the appropriate operating franchise, in this case RMB, and the rest of the banking group may then follow,” says Nxasana.

Among other products, RMB says it would focus on providing Nigerians with corporate advisory services, equity capital markets, infrastructure, project and resource finance, and fixed income services.