Nigerian Bank Nigeria Afri Bank – Core Investors Take Over Eight Banks By June

Source allAfrica.com: Leo Aligwo And Comfort Ekeleme, 18 February 2010

Meanwhile, the apex bank helmsman has hinted that new rules and regulations which would strengthen the on-going industry reforms, especially in the areas of margin lending, acquisition and prospective investors would soon be released by the CBN.

Mallam Sanusi who was represented at the third Euro Finance Conference held at the Eko Hotel, Victoria Island, Lagos, by the Deputy Governor, Finance Surveillance, Dr. Kinsley Moghalu, made it clear that any investor who wanted to invest in any of the rescued banks must demonstrate sound corporate governance, sound risk management and sound financial muscle.

To further underscore the new changes expected, the CBN boss noted that the apex bank was collaborating with other financial sector regulators such as Security and Exchange commission (SEC), Nigeria Deposit Insurance Corporation (NDIC), Pension Commission (PENCOM) and others to ensure a safe and virile financial sector.

Accordingly, he said major shareholders and other stakeholders of the eight banks had already given approval to the CBN’s proposal for the sale of the banks. He dismissed threats from shareholders grouping over the sales, stating that, the shareholders’ funds in the failed banks had been completely eroded, necessitating CBN’s bail out.

The affected banks in which the CBN had already injected a whopping N620 billion include Afri Bank, Bank PHB, Equitorial Trust Bank and Fin Bank. Others are Intercontinental Bank, Oceanic bank, spring bank and Union bank. He said that the proposed Asset Management company (AMC) designed to take over the non- performing loans would be launched second quarter of 2010. He also harped on the need for prompt clearing of the accumulated unspecified debt owed the various banks by certain individuals and corporate bodies, saying “CBN wants to emphasis on risk based supervision”.

Continuing, the CBN boss said the banking industry reforms were tailored towards creating liquidity for the banks so as to enable them lend to the real sector of the economy. In addition, he said the reforms were also aimed at sanitizing and stabilizing the banking sub sector as well as building confidence in the system. To this end, he disclosed that the CBN has initiated an internal reform measures to enable it play its supervisory and regulatory roles effectively.

Mallam Sanusi also stated that the chief executive officers (CEO’s) of eight banks were sacked because they were allegedly involved in the manipulation of shareholders funds, adding that the banks had almost collapsed even though they were still functioning admidst borrowing funds from the apex bank.

Sanusi said that despite damaging critics in certain quarters the CBN had received commendations and support from the international community regarding the on going reforms.

Nigerian Bank Nigeria Afri Bank, Bank PHB, Central Bank Of Nigeria, Equitorial Trust Bank, Fin Bank, intercontinental Bank, Oceanic Bank, Spring Bank, Union Bank