As considerations for the various recapitalization options for Afribank Plc thickens, the embattled bank may have sealed plans to shed its size by 30 per cent within the early part of 2011 in what watchers refer to as fast move to reduce mounting overhead before the real owners could emerge.
Sources close to the bank’s board indicate that the exercise has become imperative as it is key to some considerations being made by the various core investors who may be afraid of rationalisation costs or pensions and gratuity bills which must be settled before they can take over and start immediate business. This consideration is also believed to have been based on the fact that Afribank has a strong staff union which could give any investor a fight for his money.
A core investor said to be known as Vina Investments has been recently brandied as preferred although the bank has denied any serious acquisition talks with any such investor.  It was not known if the company is a local or an international core investor, but there are strong indications that none of the bailed out banks has had any serious consideration from outside the country; even Union Bank’s recapitalisation is being led by a domestic-foreign core investor.
Our investigations reveal that Afribank management may have taken a cue from Union Bank whose recapitalisation has been stalled by a strong workforce opposition.
There are also indications that most Afribank staff will be eager to be included in the exercise as they can no longer decipher the future of their bank.