Keystone Bank to sell African subsidiaries

Keystone Bank Limited, one of three lenders nationalised in 2009, is planning to sell African subsidiaries as it seeks a return to profitability.

The Chief Executive Officer, Keystone Bank, Mr. Philip Ikeazor, disclosed on Thursday that the bank was divesting businesses in Uganda, Sierra Leone and Liberia because of the bad loans on their books.

He spoke in an interview with journalists in Lagos.

Ikeazor said, “The core bank itself has currently returned back to profit, but as known, we have African subsidiaries which we had not had capital to run prior to when we took over the institution.

“And those subsidiaries on their own have had several challenges, including capitalisation issues. And while the parent company itself is required to recapitalise, we didn’t had capital to put in our subsidiaries, so clearly the subsidiaries were not performing well; but the strategy is to divest.”

While noting that the bank was at the final stages of the divestment process, the Keystone bank boss said it was important to for the lender to focus on its core business in its country.

He added the lender could only strive in other countries if it had the capital and financial muscle to do so.

“We are still operating in Uganda, Sierra-Leone Liberia and we are in the process of divesting in those locations, which we are at advanced stages for most of them,” he said.

“Basically the poor performances in those countries cannot be supported in our head office so there is no need holding onto them,” he added.

Ikeazor said the bank was also planning to sell insurance and healthcare units, while adding that it was targeting an increase of about 15 per cent growth in its loan book this year.

The Central Bank of Nigeria had in 2009 fired the CEOs of eight of the country’s lenders and bailed them out with N620bn after a debt crisis caused by loans to stock speculators and fuel importers threatened the industry.

Following this, the Federal Government set up Asset Management Corporation of of Nigeria to take over Keystone Bank, Mainstreet Bank, and Enterprise Bank in August 2011 after regulators deemed them unable to meet requirements for banking.

Meanwhile, AMCON is planning to begin the sale of Keystone bank this year after new owners take over Mainstreet Bank and Enterprise Bank in September.

On the timing of the AMCON divestment, Ikeazor said, “AMCON is fully in charge of our divestment process and they have said at several occasions that they have sequenced their three banks.”