Sterling Bank Drops Bid for Rescued Nigerian Lender Over Price

Sterling Bank Plc said it withdrew a bid to buy Keystone Bank Ltd. over the price sought for the Nigerian lender rescued during the country’s financial crisis.

“We felt we wouldn’t get it at the price we are willing to pay,” Abubakar Suleiman, the chief financial officer for Lagos-based Sterling, said by phone on Wednesday. Keystone also didn’t fit in with the lender’s “current strategy,” he said, without giving more details.

Keystone is the last lender that needs to be sold by the Asset Management Corp. of Nigeria, set up by the government of Africa’s largest economy to buy bad loans after a debt crisis in 2009 threatened to cause the industry to collapse. Keystone has assets of 318 billion naira ($1.1 billion) and operates two international units, according to Amcon, which appointed Citigroup Inc.’s Nigerian unit and FBNQuest, a unit of FBN Holdings Ltd., as advisers on the sale.

Sterling Bank will focus on growing its existing businesses, unless “another opportunity comes for inorganic expansion,’’ Suleiman said. The lender plans to raise 65 billion naira in Tier 2 capital with 20 percent of the first tranche of 35 billion naira of bonds to be sold this month, he said.

The bank expects loans to rise by 20 percent this year following the devaluation of the naira, Suleiman said. That compares with a earlier projection of less than 10 percent.

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