Biog box
Feature
Julian is an economist, with most of his experience focused in banking. H e worked as a
financial institution specialist, and credit officer as well as leading the Latin American
Financial Institutions and Public Sector credit analysis team at Citigroup. H e is currently
part of a development p r o g r a m m e called Risk Traveling Fellows. H e is a CFA L3 candidate.
Email: jregalsky@gmaiLcom
T h e opinions in this article represent solely those of the authors and by no means
represent the position of Citibank.
Direct acquisition financing will likely
Table 7: the limitations in place for some countries in the region
remain focused on a very few cases, and
Country
Regulatory capital limit
(Risk-weighted assets to
net worth)
Country
Regulatory capital limit
(Risk-weighted assets
to net worth)
offshore funding is expected to remain the
key source, particularly from global players.
Nevertheless, we should note with a high
degree of certainty t h a t regional players will
Brazil
11%
Guatemala
10%
Mexico
8%
Honduras
10%
Colombia
9%
El Salvador
12%
key economic markets is becoming more
Chile
8%
Nicaragua
10%
consolidated (probably a matter of when
Peru
9%
Costa Rica
10%
rather t h a n if).
Panama
8%
Source: Central Bank, Superintendence and/or Regulatory Body of each country
become a fiercer competitor in this particular
segment, especially when their presence in
•
1
World Bank Development Indicators.
2
America Economia, "Report: The Latin
American banking industry in 2011".
OUTLOOK
Given the international scenario of
3
Central Bank of Brazil.
Regional players are very eager and have
uncertainty arising from European woes,
4
The Economist Intelligence Unit, "Country
publicly stated their appetite to expand
which very likely impact on the global
abroad. S t r o n g balance sheets have allowed
economy, we would expect M & A activity
5
Ibid.
many banks, particularly from Brazil,
to decrease. However, there should be
6
National Banking and Securities Commission
Colombia and Chile, to be potential buyers
plenty more action, as this may be the most
although we cannot discard their use of
appropriate time for acquirers to get attractive
direct financing for acquisition.
pricing.
Finance" (2012).
(Mexico).
7
The Economist Intelligence Unit, "Country
Finance" (2012).
Nigerian Banl< transactions
ACCESS BANK PLC V AKINGBOLA AND OTHERS [2012] EWHC 2148 (COMM)
(QBD, COMMERCIAL COURT) (BURTON J) (31 JULY 2012)
FACTS
and Allied M a t t e r s Act ( C A M A ) . It was D r A's strategy hidden in
Access Bank pic (the Bank) (formerly Intercontinental Bank pic (IB)
t h e books, by virtue of t h e absence of written instructions to the
t h a t merged into the Bank in 2011) sued D r Akingbola (Dr A) and
stockbrokers and the warehousing of t h e shares in a subsidiary of IB.
companies in which he had an interest for very substantial sums. D r
There was an apparently unjustified massive rise in the Bank's share
A was the managing director and a substantial shareholder in IB at
price. T h e total loss was well over £500bn. O n claim (ii), the judge
all material times until August 2009, when he was removed by the
was satisfied t h a t over £ 5 0 m was extracted from the Bank without
Governor of the Central Bank of Nigeria. There were, inter alia, two
lawful justification to assist D r As company with its substantial
claims against D r A: (i) there was a strategy spearheaded by D r A, of
indebtedness, much of which was guaranteed by D r A personally.
I B s unlawfully buying its own shares in large quantities; and (ii) D r A
D r A understood the urgent need to getting monies out of the Bank
paid away £ 6 8 m to various companies of which D r A was a director,
while they were still there. D r A was central to that decision.
and which he, and/or his wife or family, directly or indirectly owned.
The court had a power to grant relief under s 558 of C A M A
(equivalent to s 727 of the Companies Act 1985). The judge could
CONCLUSION
not see that, in t h e light of the findings he had made, D r A could be
T h e j u d g e found for t h e claimant in respect of claims (i) and (ii).
said to have acted either in respect of claim (i) or (ii), "honestly and
It was agreed that, although English decisions were not p a r t of
reasonably'; certainly not so far as claim (ii) was concerned, and as for
Nigerian law and not binding on Nigerian courts, they were
his strategy in claim (i), quite apart from being contrary to Nigerian
nevertheless of highly persuasive value. In t h e i n s t a n t case, t h e
law, it was simply wrong-headed, and was plainly a substantial
t w o relevant English authorities were applicable o n w h e t h e r t h e
contributing factor to the collapse of the Bank.
lending of money by IB fot t h e acquisition of its o w n shares was
in t h e o r d i n a r y course of its business. The B a n k implemented t h e
J o n a t h a n Lawrence, K & L G a t e s
strategy to purchase t h e shares contrary to s 160 of t h e C o m p a n i e s
jonathan.lawrence(3)klgates.com
Butterworths Journal of International Banking and Financial Law
www.klgates.com
September 2012