Keystone Bank Sale: Why Sterling Bank backed out

The last may not have been heard of the under current moves aimed at selling one of the nationalized banks, Keystone Bank which has been stalled.

This is against the backdrop of a discontinued negotiation between Sterling Bank and the Assets Management Company (AMCON) last week over the matter.

Attention had been drawn to the last minutes move by the Sterling management to meet the conditionality, set aside for any interested body or institutions to acquire the last of the set of banks with toxic loans.

They were three years ago classified near-insolvent before the Central Bank of Nigeria opted to acquire them on public trust.

Just last year, Enterprise Bank was bought over by Heritage Bank, while Mainstream Bank went to Sky Bank, leaving Keystone with three major banks gunning for its acquisition, from which Sterling came up tops.

But it was learnt that the inability of the bank to convince AMCON to further reduce the liabilities, classified under the about-to-be sold outfit led to a stalemate in one of the meetings to finalise the buy off plan.

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The debt profile of the bank, which is hidden from public glare,is said to be within the grab of politicians, most of who were no longer in power and whose collateral were not worth exactly the value attributed to them at the time of obtaining credit facilities from the bank.

Though Abubakar Suleiman, CEO of Sterling Bank, was quoted as having said the reason for resting take over moves for the bank was on new findings, based on strategic reasons, sources close to both CBN and AMCON said there were more to that.

Some other undisclosed reasons adduced as the main issue, and which could not be resolved before the end of the talks, included agreeing on what the bank’s books were before agreeing to putting pen on paper.

Hear Suleiman: “We reviewed Keystone Bank and concluded the strategic fit was not strong enough. We will continue to evaluate all the options. As new candidates come into the market, we will also review them.”

He maintained that the bank was still perfecting plans to acquire any bank in Nigeria but that the terms must be right.

However, officials of Keystone have continued to insist that the bank was still viable to compete with any other rivals, if agencies of government go after its debtors in real terms.

 

 

 

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