First Bank of Nigeria Plc, Nigeria’s largest bank by market value, said it will buy banks bailed out by the Central Bank of Nigeria (CBN) as long as they fit the company’s strategy.

“Whilst we’re implementing the organic growth initiatives in house, we also have our eyes open for opportunities,” Chief Executive Officer Stephen Olabisi Onasanya said in an interview published today by Lagos-based Punch newspaper. “We will, however, only touch candidates that have value to add to our system and that fit into our strategy.”

He declined to identify possible targets and said any acquisitions won’t affect talks with Ecobank Transnational Inc. of Togo over a merger. The companies have been in talks since 2005 on combining their businesses.

First Bank was one of 14 lenders that passed an audit by the Central Bank of Nigeria (CBN) last year and joins South African banks, Standard Bank Group Ltd. and FirstRand Ltd., which said on Jan. 14 that they’ll bid for Nigerian banks. The audit resulted in N620 billion ($4.1 billion) being injected into 10 banks to cover bad debts, while the chief executive officers of eight banks were fired and replaced.

The CBN’s reforms will guarantee a “shift in behavior in the short run” and must be sustained by regulators if they are to work, Onasanya told the newspaper. With stability returning to Nigeria’s banking industry, revenue will start increasing and share prices may gain, he said.

“By the second quarter, when banks begin to publish their results and people begin to see that they are making profits, investors will begin to take positions and you will now see some reasonable price movements,” he said in the Punch interview.

“You will never have the kind of price movements that you saw for the past five years. It is not realistic and it is not going to happen again,” Onasanya said.

Nigeria’s economy will continue to expand from the estimated 7% growth achieved last year as long as government spending increases, the political environment remains stable and efforts to secure peace in the oil-rich Niger Delta continue, Onasanya said.

Nigeria’s Federal High Court will deliver judgment on Jan. 22 on a lawsuit seeking to declare President Umaru Yar’Adua incapable of carrying out his duties. Yar’Adua hasn’t appeared in public since his personal physician said on Nov. 23 he was flown to Saudi Arabia to receive treatment for a heart ailment. His failure to officially hand over power to his deputy has left Vice President Goodluck Jonathan unable to exercise presidential powers until recently. On Jan. 14, a Nigerian court cleared Goodluck Jonathan to assume presidential powers without assuming the role of Acting President.

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Source(s): Bloomberg News