LAGOS Oct 29 (Reuters) - Nigeria's First City Monument Bank (FCMB) (FCMB.LG: Quote) has made a bid to acquire local rival Finbank (FIRSTIN.LG: Quote), one of the lenders rescued in last year's $4 billion bailout, banking sources said on Friday.

The Nigerian stock exchange said Finbank had announced it was in negotiations with a potential strategic investor but gave no further details. Finbank shares closed up 4.7 percent at 0.66 naira, shortly before the announcement was made.

"We have made a bid. I think ours is the preferred bid but we have not been announced as the winner yet," a source at FCMB said, asking not to be named.

A source at Finbank also said FCMB was the preferred bidder.

Nigeria's central bank rescued nine lenders deemed to be dangerously undercapitalised in a $4 billion bailout last year and has since been seeking new investors to recapitalise them.

Central Bank Governor Lamido Sanusi said two weeks ago five or six of the rescued lenders would be announcing negotiations with potential suitors in the coming weeks. [ID:nLDE69D1GQ]

He said in August the central bank had received bids for four of the rescued banks and that foreign institutions were involved in the bidding process as well as several local banks and private equity firms.
Finbank was created out of a merger between First Atlantic Bank, Inland Bank and IMB Bank during consolidation four years ago. Analysts consider it a ripe acquisition target because it offers a niche business and a potential acquirer will not exceed the market share rules set by the central bank.

FCMB had its origins in investment banking as City Securities Limited before being established in 1982. It has 150 branches across Nigeria, an investment banking subsidiary in London and a representative office in South Africa.

Union Bank (UBN.LG: Quote), another rescued lender, said on Thursday it was in talks with a potential core investor. Banking sources said the talks were with a local private equity firm potentially in conjunction with a consortium.