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IFC and IFC ALAC Fund Invest in First Bank of Nigeria to Support Nigeria’s Banking Sector

IFC, a member of the World Bank Group, and IFC Asset Management Company today announced a $100 million investment in First Bank of Nigeria that will provide the bank with long-term capital. IFC’s investment is part of its strategy to support Nigeria’s reform efforts.

IFC is encouraged by the financial sector reform policies that have stabilized the banking sector and positioned it for solid expansion in the future. First Bank of Nigeria is well positioned to realize strong profitable growth in this environment.

IFC will invest $87.5 million in First Bank of Nigeria, consisting of a long-term senior loan of $50 million and a subordinated convertible loan of $37.5 million. The IFC African, Latin American, and Caribbean Fund (ALAC Fund), which is managed by IFC Asset Management Company, will provide a subordinated convertible loan of $12.5 million to the bank.

IFC and FBN also signed a cooperation agreement to work together over the next two years in trade finance, insurance, microfinance, mobile banking, and regional expansion, among other areas.

IFC’s investments are part of a strategy to help strengthen Nigeria’s banking sector in the aftermath of the global financial crisis. The strategy includes: providing long-term financing to help well-managed, systemic banks improve their reach to smaller businesses and other underserved market segments; helping partner banks improve their corporate governance and risk management, as well as developing robust environmental and social monitoring systems; and supporting the Central Bank's initiatives to strengthen the overall banking sector

Bisi Onasanya, Group CEO, First Bank of Nigeria, said, “The investments from and partnership with IFC and IFC’s ALAC Fund will assist First Bank of Nigeria achieve its strategic growth objectives. IFC’s investment is also a stamp-of-approval of our bank’s strategy and commitment to good corporate governance and risk management.”

Jyrki Koskelo, IFC’s Vice President of Global Industries, said, “IFC’s investment in First Bank of Nigeria reflects our commitment to supporting Nigeria’s banking sector as it reforms following the recent turmoil in global financial markets. It is the start of a strategic partnership through which IFC hopes to increase its support for key sectors of Nigeria’s economy.”

Gavin Wilson, CEO of the IFC Asset Management Company, said, “We believe this is a good moment to be investing in the Nigerian banking sector as reforms take hold and the better capitalized and managed banks lead the post-crisis consolidation phase. First Bank of Nigeria is at the forefront of these developments and we are pleased to be participating in their future growth.”

www.ifc.org

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Tags: IFC, Nigeria, investment

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