http://www.bloomberg.com/apps/news?pid=newsarchive&sid=axUJKTYPoeA0

Ecobank Nigeria to Merge With Sterling Bank to Expand (Update1)

By Paul Okolo

Oct. 15 (Bloomberg) -- Ecobank Nigeria Plc will combine its assets with those of rival Sterling Bank Plc in the biggest merger since 2005, when the Central Bank of Nigeria restructured the banking industry in Africa's most populous nation.

``We're merging,'' Ecobank Nigeria Chief Executive Officer Ofong Ambah said today in a telephone interview from Lagos, the commercial capital.

A joint-statement on the deal will be released later by the two banks, Bimbo Sowemimo, a spokeswoman for Sterling Bank, said by telephone. The combined bank will have about 200 branches and a market value of 269.8 billion naira ($2.17 billion), according to Bloomberg data.

Ecobank is trying ``to scale up'' as part of its objective to become a top-three player in the country, Pabena Yinkere, analyst at investment company Afrinvest West Africa Ltd., said in a telephone interview.

Ecobank Nigeria, a unit of Lome, Togo-based Ecobank Transnational Inc., which has operations in 19 west and central African countries, has been holding pre-merger talks with rivals, Ambah said in an interview on Sept. 20. In May, it signed a memorandum of understanding with Unity Bank Plc, Nigeria's fourth-largest by branches, designed to increase its presence in northern Nigeria where it's currently not well represented.

The merger is the second since the restructuring of the industry in 2005, which saw the number of operators cut to 25 from 89.

In the first merger among the surviving banks, Johannesburg-based Standard Bank Group Ltd., Africa's biggest lender, last month acquired control of IBTC Chartered Bank Plc by combining its operations with that of its local subsidiary Stanbic Nigeria Ltd.