CBN gets buyers for troubled banks

Tuesday, 29 June 2010 00:00

• President woos foreign investors
• N’Assembly may review 2010 budget
THREE international banks and some local investors have offered to take over five troubled banks in Nigeria.
Governor of the Central Bank of Nigeria (CBN), Malam Sanusi Lamido Sanusi, disclosed yesterday in Basel, Switzerland, that the picture on the sale of the banks would become clearer by mid-August this year.
Sanusi said that the prospective buyers would submit their offers to the Federal Government by mid-July.
According to him, “we have got three international banks that have remained in the serious running to acquire the banks. We also have a number of private equity houses and local lenders, who will submit offers for banks bailed out by the state by mid-July.”
He said the interested parties were undertaking “detailed” due diligence on the affected banks.
Sanusi told journalists in Basel that “by the middle of August, we should actually have clear visibility on at least five of the banks.”
The CBN chief said, “securing a future for Union Bank, Oceanic, Intercontinental, Bank PHB and Afribank is our priority as these banks are the most systematically important” to Nigeria.”
Also yesterday, President Goodluck Ebele Jonathan pledged his administration’s resolve to execute programmes that would make Nigeria more attractive to foreign investors.
Jonathan told the outgoing Ambassadors of China and The Netherlands in separate meetings that Nigeria will do what is necessary to attract more foreign investments because it is conscious of the fact that foreign investors are needed to create jobs for the country’s growing youth population.
Similarly, the Speaker of House of Representatives, Dimeji Bankole, has said the National Assembly would work with the Federal Ministry of Finance and other departments of the Executive arm of government to review the 2010 budget if there was a drop in the price of oil in the international market.
He told journalists at the Presidential Wing of the Murtala Muhammed Airport, Ikeja, Lagos, on his way to Abuja that the National Assembly might as a result of reduction in the prices of oil, cut the budget by 45 per cent.
Meanwhile, a senior Standard & Poor's analyst has said Nigerian banks continue to look extremely risky despite the bailout measures of the CBN last year.
“The Nigerian banking system is very high risky. The ratings we have for the banks are in the single B category, it's at a low level compared to most banks in the world," Managing Director for Financial Institutions at S&P, John Gibling, said at the Nigeria Golden Jubilee Business Summit 2010.
"We continue to see the Nigerian banking system as very high risky. In regulatory reform there is still a long way to go."
The CBN hopes investors will recapitalise nine banks rescued last year through a $4 billion bailout by the government.
Jonathan welcomed the increased volume of trade among Nigeria, China and The Netherlands, adding that Nigeria had opened its doors to foreign investors more than ever before in aviation, power supply and infrastructure, previously run by the government alone.
The President assured the outgoing envoys that his administration would deal with all domestic issues that could discourage foreign investors, stressing that progress had been made in areas such as peace in the Niger Delta and power supply.
Jonathan reiterated his commitment to good governance as well as free and fair elections in Nigeria next year, stating that steps would be taken to address grey areas in the electoral system.
He thanked Ambassadors Arie Van Der Wiel of The Netherlands and Xu Jiango of China for their efforts in the past four years to promote trade and cooperation between Nigeria and their countries, and wished them well at their new posts.
Bankole, who reacted to questions on why Jonathan asked for a review of the 2010 budget, said: “As far as the 2010 budget is concerned, we are working with the Executive arm of government to make sure that the National Assembly pass it so that we can move forward in building the nation.
“I am sure it (a reduction in the prices of oil) could affect the budget but those things would be worked out within the appropriation committees of the National Assembly and the Finance Ministry,” he said.
The National Assembly had in March passed a budget of N4.6 trillion, up from the N4.02 trillion submitted in November 2009 by the Special Adviser on National Assembly Matters, Senator Mohammed Abba-Aji, on behalf of the late President Umaru Musa Yar’Adua.