As the Federal Government takes over Keystone Bank, analysts have projected that it will be looking at a restructuring, a sale, or a merger to boost the fortunes of the lender.
The projection came days after the Lagos State High Court, Ikeja, ordered the forfeiture of shares previously held by the bank’s former shareholders, Sigma Golf Nigeria Limited and Alhaji Umaru H. Modibbo.
The bank described the development as a significant milestone, which would position it for sustained growth, stronger partnerships, and enhanced profitability.
Speaking on the development, a former president of the Chartered Institute of Bankers of Nigeria, Okechukwu Unegbu, told The PUNCH the move by the Central Bank of Nigeria to reassure bank customers of the stability of the bank was key.
He said, “The CBN has even confirmed that there is no problem with the bank, which is the first assurance to the members of the public. I believe in that. In terms of the options open to the Federal Government is to take the bank public. Float all the shares to the public and let them be quoted on the stock exchange.
“At the same time, they should look at the management of the bank; they should put that bank on a strong footing by ensuring that the board of the bank is populated by experts, not just people who have a political bias. I see the board as not a properly consolidated board. So, if the bank is made public, the shares will elect qualified professionals in the bank.”
The idea of people who are just, for me, political jobbers is not the best for these institutions. There are other banks too that CBN will need to look at. I don’t think that the bank should be run by the government; even the Central Bank cannot do it because it is supposed to be a regulator and not a runner of a bank.”
Also, Meristem in its weekly market report projected that the FG “may explore restructuring, re-privatisation, or a strategic merger, with investors closely watching regulatory decisions on the
bank’s future.”
Keystone Bank was one of the three banks whose board and management were sacked by the CBN in January 2024.
CBN said the dissolution of the board and Management of Union Bank, Keystone Bank, and Polaris Bank became necessary due to the non-compliance of these banks and their respective boards with the provisions of Section 12(c), (f), (g), and (h) of the Banks and Other Financial Institutions Act, 2020.
The bank’s infractions vary from regulatory non-compliance, corporate governance failure, disregarding the conditions under which their licenses were granted, and involvement in activities that pose a threat to financial stability, among others,” part of the CBN statement read.
Since then, Keystone Bank and others have been run by the management appointed by the Central Bank. For Keystone Bank, the CBN appointed Hassan Imam as Managing Director/Chief Executive Officer and Chioma Mang as Executive Director.
