By Emele Onu with agency report, 08.17.2010 

 

Prospective and ready buyers have emerged for four of the eight banks rescued by the Central Bank of Nigeria (CBN) last year, the apex bank’s Governor Sanusi Lamido Sanusi said yesterday, although he did not disclose the names of the banks or the bidders.

 

“The advisers have finished analysing bids already received for four of the banks,” Sanusi was quoted by Reuters as having told CNBC Africa television. The CBN governor said two foreign institutions were involved in the bidding process, as well as several local banks and private equity firms in partnership with foreign financial institutions.

 

The CBN governor also said the monetary authority would be satisfied with a headline inflation rate of 9 per cent to 9.5 per cent. He pointed out that the priority of the CBN is getting credit flowing again in the country and that creating economic growth was the main concern of the apex financial institution.Nigeria’s consumer inflation eased to 10.3 per cent year-on-year in June this year, calculated as the lowest in the country in more than two years.

 

Sanusi said: “When you have a country of 150 million people, with 70 per cent below the poverty line, it is extremely important  to provide a stable environment and to ensure that the growth of the economy is not hampered by some desire to pursue a very low single-digit rate of inflation.” According to him, “We (the CBN) have brought inflation down in the last one year from 16 per cent to about 10 per cent,” adding: “We think we can do single digits and that is good enough; 9 per cent to 9.5 per cent would do for me.”

 

The CBN had following the joint examination on the 24 banks last year found the affected banks (Oceanic Bank, Intercontinental Bank, Union Bank, Afribank, Finbank, Equatorial Trust Bank, Spring Bank and BankPHB) in “grave condition”. It sacked their executive management and injected fresh N620 billion in the form of tier two capital to enable them continue to meet their obligations. The banking watchdog later called on interested parties to bid for stakes in the institutions.

 

Foreign banks including Standard Bank Group, First Rand, Old Mutual Plc – all South Africa financial institutions, as well as a number of private-equity firms and local banks such as First Bank PLC, Fidelity Bank, Ecobank and Skye Bank had carried out due diligence on the banks and filed their expressions of interest (EOI).The CBN had given July 31 deadline for the submission of bids on the banks, as a prelude to the announcement of preferred and reserve bidders between this month and September.Sanusi told CNBC Africa Television that bids for the remaining banks are expected to have been completed by the end of this month.

 

On the asset management corporation of Nigeria (AMCON) billed to purchase the non-performing loans of the banks, the apex bank chief stated that  much work had been done in the last month to value the bad loans of the banks and gauge how much of them are unsecured.He said a recommendation had been made to the president on the constitution of AMCON’s board and was confident that once that was approved, deals to buy non-performing loans from the rescued banks could quickly be announced.

 

“I don’t see any reasons why AMCON can’t take these decisions in the next few weeks,” he said, but added that the recovery of bad assets would take much longer. “As far as the details are concerned, it will take a year to go and audit every asset, to do every valuation, do legal due diligence, set up systems and processes,” he added.

 

Source:ThisDay