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CBN okays Fidelity, FSB pre-merger

Posted by By Omoh Gabriel, Business Editor on 2005/10/11 | Views: 550 |

CBN okays Fidelity, FSB pre-merger


THE Fidelity Bank-FSB International Bank merger plan has received the approval of the Central Bank (CBN) for the two institutions to proceed with their arrangements.

LAGOS—THE Fidelity Bank-FSB International Bank merger plan has received the approval of the Central Bank (CBN) for the two institutions to proceed with their arrangements. The apex bank gave a pre-merger consent to the union last Thursday in a record time of less than a week from the date of the application.
Industry sources say the expedited consent is reflective of the enormous goodwill enjoyed by the two merging institutions as well as the determination of the apex bank to encourage serious institutions on their consolidation plans.

The Boards of Fidelity Bank Plc and that of FSB International Bank Plc at separate meetings recently approved the merging of the businesses of the two banks to form one entity. The emerging institution will bear the name Fidelity Bank Plc, which will be rendered in the colours of FSB. The new entity which is expected to have a shareholders funds in excess of N25 billion would have total assets of about N104 billion and a network of 64 branches. The union of Fidelity and FSB has been described as visionary because of the synergies it will produce.

Fidelity Bank Plc began operations in 1988 as a merchant bank and converted to commercial banking in 1999. It became a universal bank in 2001. FSB International Bank Plc is a product of the successful restructuring, in 1989, of the former Federal Savings Bank which was a parastatal of the Federal Government.
Already, the process of integration of the two institutions has started with their top managers having had some meetings. The integration process of the institutions is expected to be speedy and seamless as they are both acclaimed to have similar cultures of professionalism and a consciousness for meeting customers’ needs and building their brands.

Meanwhile, FSB International Bank Plc recorded a quantum lift in its profit after tax of N1.042 billion during the financial year-ended March 2005. This represents a 450 per cent growth over the 2004 performance.

Despite the difficult business environment under which the bank operated during the period, its balance sheet recorded a growth of 9.4 per cent from N58.9 billion in 2004 to N64.4 billion in 2005. This performance was greatly enhanced by increase in deposits and contingent liabilities. Gross earnings increased to N7.103 billion from N6.442 billion recorded in the preceding year, as a result of growth in other banking income. Operating expenses for the year closed at N4.5 billion, representing a decrease of seven per cent when compared with the N4.8 billion recorded in the previous year.

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