By Oluwaseyi Bangudu  

 

The Central Bank is yet to offer any clue on the interested bidders for some Nigerian banks, months after officially declaring them up for sale and open to investors.However, five or six of the banks rescued in a $4 billion bailout last year will announce negotiations with potential investors in the coming weeks, the Central Bank governor, Sanusi Lamido Sanusi, said yesterday, according to a Reuters report.“In the next two to three weeks, you will hear announcements from five or six institutions about negotiations on registered acquisitions,” the report quoted him as saying.

 

The Central Bank has over the months, indicated that it has been receiving bids from interested local and international investors in the rescued banks. It also gave indications that it 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 in partnership with foreign banks.The Central Bank rescued nine banks last year, which it deemed undercapitalised and posing a risk to the other banks in the system. It has since been seeking new investors to recapitalise them.

 

A Central Bank staff, who asked not to be named, said worries on whether there are bidders should be put to rest, assuring that the interested investors would be named soon.“At least three investors, both local and foreign, are in talks with each of the rescued banks. Negotiations are on,” he said, adding that it is when choices have been made and due processes have been followed, that the regulatory body would make the names public.

 

Awaiting Asset Management Company

The Central Bank also stated that the Asset Management Company (AMCON), set up to purchase non-performing loans and chase the recovery of bad loans, would begin purchasing assets in the next “two to three weeks. By the end of this year, we will have put the banking problems behind us,” the report said.

 

Finance experts, however, said there still remain some blurred aspects on the administration of the company, which is expected to acquire eligible bank assets from eligible financial institutions, purchase, or otherwise invest in eligible equities among others.Bismarck Rewane, managing director of Financial Derivatives Company, for instance, said there are still some unclear issues regarding the administration of the company.“Issues on the funding of AMCON remain unclear, though the AMCON executives have been cleared by the Senate and investors are already scrambling for deals and steals. The AMCON CEO, however, remains upbeat to deliver on mandate.

 

“Biddings have closed for rescued banks, and announcements of the preferred bidders will be made in October. AMCON should be in a position to absorb a good level of toxic assets in 2011. The final negotiation and central exit is expected early 2011, existing shareholders are to be carried along in the process,” Mr. Rewane said.The nine bailed out banks made provisions by the end of September of more than 2.2 trillion naira for loan losses. Potential investors are anxious to see how quickly the AMCON can be set up to soak up bad debts and make the banks attractive.

 

Source:NEXT