Doing business in Nigeria is tough not only for the small business and tech startup; it is also tough for financial institution. Yeah the Institution Company and business run to when there is financial problem.
But because their wound up can course havoc to the economy of a country they do not die like other business do instead they merged with other bank or get acquired.
The purpose of this article is to show you the list of merged banks in Nigeria, why they merged and the havoc their merging is causing.
Bank also merged sometimes because of reform such as CBN reform of 2004 which put many banks in to merging lane, sincerely banking industry is a heavily regulated one that is why it is tough to get a license
Before we start I will like you to understand what merger and acquisition is
What is Merger and Acquisition
Merger is the mutual agreement of two or more company to become one giant company; usually they do this to tackle competition.
While acquisition occur when giant company buy out another company that is already near bankruptcy, not doing well or want to cash out.
List of merged banks in Nigeria
Access bank plc the king of merger
Access bank is one of the bank in Nigeria that has undergo a lot of merging, looking at the bank it is made up of talent and skill form deferent banks no wonder they keep thriving even going as far as Kenya to have a presence.
Access bank merging history
It merged with marina bank in 2005m
It merged with intercontinental bank in 2013
It merged with diamond bank in 2019.
Diamond bank is also three banks in one; before they couple with Access Bank they have merged with two banks which are Devcom bank and Lion bank.
Stanbic IBTC Bank
Stanbic and IBTC bank are separate bank before they merged together but unlike other merger this one is based on coupling strength of two giant to beat the completion.
They each have their strength, prior to merger IBTC is an investment bank and trust company while Stanbic is just a normal bank.
At the time of their merger they each have 2 trillion naira and 500 billion naira asset which shows that they are standing right before merging.
The merging of two bank pay off as they are still standing today while many bank continue to wound up in face of difficulties and economic downtown.
United bank of Africa (UBA)
United bank for Africa by far is the popular bank in Nigeria especially among youth and this can be attribute to the fame of one of is founder in person of Tony Elumelu. It’s rare to talk about the entrepreneur without talking about his bank.
UBA has his own fair share of merging in the past before they stabilize, it merged with continental bank and Nigerian standard trust bank.
Sterling is a strong bank in Nigeria, and continue to wax stronger, they recently launch their own digital bank in response to online banking competition, they don’t want to lose out.
Startling bank merged with NBM bank, Indo Nigeria bank, NAL bank plc, Trust bank and Magnum trust bank
Another merged bank in Nigeria is Unity bank. Wait when you hear unity what do you think it’s all about? Just a name of course no, it was formed when 9 banks merged together shortly after CBN reform of 2004.
As we can see the reform really pay off as they are currently one of the best bank in Nigeria.
The list of bank that merge together are Unity Capital and Trust Bank, Hexali properties Lmt, Unity kapital Assurance, Northlink Insurance Brokers limited, Canada Management Services limited, unity bank plc, Unity Registrars limited, Newdevco Investment and Security limited, Pelcan prints limited.
First bank plc
First bank as their name implies are indeed first in Nigeria, their service is top notch and their customer care is great perhaps all this come with experience as they have been operating for many years now.
They have also went thread the road of merging and the bank they merge with are
- Intl bank
- Mbc bank
- Fsd bank
Skye bank plc
It was a mix feeling in 2018 when Skye bank merged with Polaris (it is an outright acquisition), what can go wrong we all ask.
Back then sky bank was one of the strong bank in Nigeria perhaps it was due to economic situation of Nigeria.
Prior to merging with Polaris in 2018 they have merged with the following banks
- Cooperative Bank Limited
- Pridetin Bank plc
- Bank Limited
- Reliance Bank Limited
First City Monument Bank (FCMB)
FCMB is another strong bank that has undergo merging in Nigeria. It was formed by the merger of three prominent banks which are NAMBL, First City Bank, Cooperative Development bank and Findback Bank in 2009.
Union bank plc
Union bank also go the lane of merging like FCMB, Union bank is comprise of three bank which are
- Universal Trust bank
- Broad Bank of Nigeria
- Union Merchant bank
Following the reform of 2004 by the CBN spring bank was birthed from the merging of six Nigeria bank , the merger prove to be good even shortly after their merging, union bank was announced to have more than 150 billion naira in asset and over 34 billion naira as capital base.
Below are the bank that come together to form union bank.
- ACB International bank plc
- Citizen international bank
- Fountain trust Bank plc
- Omega bank plc
- Trans International Bank plc.
- Guardian Express Bank plc
Wema bank, one of the fore front of digital bank in Nigeria, like starling bank they quickly adjust to reality and start their own digital bank called Alat, currently it is working in all the state of Nigeria.
For Wema it was not always rosy, they have also merged with a bank called National bank. Apart from this bank there is no public notice of any merger from them.
Ocean bank was also birthed from the merger of two strong banks which are International Trust bank and Ocean bank shortly after the 2005 reform by CBN.
First inland bank plc
The 2005 reform was also the reason for the existent of First Inland bank plc. It was birthed from the merger of 4 banks which are
- Inland bank
- First Atlantic Bank Plc
- NUB International Bank Ltd
- IMB International Bank Plc
Keystone is a new bank it was established in 2011 and rightly after that it acquire PHB bank. Prior to that PHB bank was formed from the merger of Habib Nigeria bank and Platinum bank limited.
Eco bank was formed from the merger of three banks which are
- Oceanic Bank
- International Bank Plc
- International Trust Bank
Why bank merges in Nigeria
There so many reason why bank merges in the in Nigeria and in entire world. Some this reason are
We all know what happen to business when economy is bad especially during recession there will be no people to patronize them again since the little they have will be used to purchase food anything that can make them survive.
Nobody will remember to buy shoe or bag, the same thing apply to bank nobody will remember to save and the loan they give out will not bring return (since there will be a lot of defaulter).
Expansion and buy out
Most of the merger is not as a result of economic downtown some time it can be because of expansion, some bank will want to expand through acquisition of other bank mostly already failing bank, they believe it is more cost effective considering the fact that it will save them campaign money that will be use to acquire specific group of customer in a specific location
Banks also merged together as a result of competition, whenever there is a stiff competition in a country like Nigeria two or many bank can come together to uphold a common interest.
As you can see most of the merger in Nigeria is a result of CBN policy. CBN is the regulator of financial institution and when it comes with unfavorable policy bank have to do something to it by merging.
Havoc bank merging is causing in Nigeria
The problem bank merging is breeding in Nigeria is that, we are now having a behemoth of bank like First bank and Access bank beating the competition and do you know what that means; it will be hard for entrepreneur with better foresight to enter into banking industry in Nigeria.
To buttress my point do you know why CBN has not given MTN and other network go ahead to enter Fintech industry, because they will beat down the competition and become monopoly.
Monopolistic is bad for consumer, you won’t have many choice than to choose what available even if what available is poor.
Above is the list of merged bank in Nigeria, and as you can see the reason they merge is mostly due to CBN reform.
As an entrepreneur I will advise you to look before you leap, know your industry in out to avoid situation where you sell your company unripe.
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