SEVEN months after First Bank of Nigeria Plc moved to acquire Equatorial Trust Bank Limited (ETB), the bank has backed out of the deal. BusinessWorld gathered that the sudden withdrawal of First Bank may not be unconnected with the failure of the two parties to agree on all the fine details of the deal.
Sources said there were discussions between the boards of ETB and First Bank of Nigeria Plc, with a view to forging a merger or acquisition arrangement. BusinessWorld gathered that First Bank has gone deep down in carrying out its own assessment of the books of ETB with a view to determining the true worth of the bank. Insider sources told BusinessWorld that First Bank suddenly decided to call it quits probably on the grounds that it no longer considered the acquisition as one that would increase its shareholder value
Highly authoritative sources told BusinessWorld that ETB has repaid the N30 billion bail-out funds extended to it by the Central Bank of Nigeria. The source however said that the bank still needs about N30 billion to bring its shareholders’ fund to a positive level and another N25 billion to do good business. Since ETB is riddled with very bad loans in its books, Dr. Mike Adenuga Jr, the chairman as well as the owner of the bank has been making frantic efforts to recapitalise the bank to the tune of N50 billion to aid its operations.
According to the Deed of Covenant approved by the CBN for execution in order to boost the capital base of the bank and position it on operational efficiency pedestal, the shareholders of ETB were to re-capitalise it by way of injecting additional capital latest by June 30, 2010; restructure, diversify and enlarge the capital base either by  public offering, core investor or merger with a local bank.