Nigerian Bank Nigeria Afribank Nigeria Plc – Nigerian Bank Investors Pick Top 3 Sanusi Tells CNBC

Source Businessweek: Renee Bonorchis, February 11, 2010

Investors interested in acquiring stakes in the banks bailed out by the Central Bank of Nigeria have been asked to make their top three choices, Governor Lamido Sanusi said in an interview with CNBC Television today.

“We’ve done a technical due diligence and are selecting partners that are acceptable to the bank,” he said from the commercial capital, Lagos. Other shareholders and depositors can then negotiate the terms for the sale, he said.

Standard Bank Group Ltd., FirstRand Ltd., and Old Mutual Plc, three of South Africa’s largest financial institutions, said in January they were interested in buying stakes in the lenders. Nigeria’s central bank said in October last year it will limit domestic banks’ market share to 20 percent and invite foreign interest in acquiring stakes in the 10 Nigerian institutions that failed an audit and shared a 620 billion-naira ($4.1 billion) capital injection from the central bank.

“There has been a strong expression of interest in the banks from local and foreign banks,” Sanusi said, adding that the sales process may be completed by April. Finalizing the deals depends on Nigeria passing the Asset Management Company Bill, which Sanusi said is “taken for granted.”

Nigeria’s 10 failed lenders are Afribank Nigeria Plc, Finbank Plc, Intercontinental Bank Plc, Oceanic Bank Plc, Union Bank Nigeria Plc, Bank PHB Plc, Spring Bank Plc, Equatorial Trust Bank Plc, Wema Bank Plc and Unity Bank Plc.

“We are trying to fast track reforms,” Sanusi said. “We have got to separate commercial from investment banks. We’re also creating new holding-company structures so banks can take risk with that capital and not depositors’ funds.”

In the year to date, the Nigerian Stock Exchange Banking Index has gained 12 percent, with the only distressed lender in the index, Union Bank, having returned 5.5 percent.

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