FirstRand Eyes Nigerian Mainstreet and Keystone Banks for Growth

FirstRand Ltd. (FSR), South Africa’s second-biggest financial-services company, would consider buying Nigeria’s Mainstreet Bank Ltd. or Keystone Bank Ltd. to help establish a consumer-banking presence in the country.

The lenders are held by Nigeria’s Asset Management Corp. which was set up in 2010 to nationalize and manage the banks after bad debts mounted amid allegations of corruption. Amcon, as its known, already asked for expressions of interest in Enterprise Bank Ltd. and hopes to sell all three lenders by the end of next year, according to a statement on its website.

“We would not be interested in Enterprise but would consider both Keystone and Mainstreet,” Sam Moss, director of investor relations at FirstRand, said in an e-mailed response to questions today. “There’s no formal process yet and we have no idea when it will start.”

The three Nigerian banks were among eight bailed out by the Central Bank of Nigeria in 2009 amid a lending crisis that threatened the financial system in sub-Saharan Africa’s second-largest economy. FirstRand last year set up an investment bank in Nigeria and wants to follow that with retail operations to help fund the unit while profiting from growth in Africa’s most populous country.

FirstRand ended talks to buy Nigeria’s Sterling Bank Plc in 2011 after the parties were unable to agree on terms.

Source: Bloomberg BusinessWeek