No word on Savannah Bank recapitalization

By Oluwaseyi Bangudu October 21, 2010 


Savannah Bank, whose licence was restored 18 months ago, says it has other issues to address than the recapitalisation deadline given by Central Bank.The bank, which was ordered to be reopened in February 2009 by the Court of Appeal, was given 18 months to raise N25 billion for its recapitalisation.


“The present state is that the verification exercise of assets and renovation is going on,” said Wemimo Ogunde, the lawyer who argued the bank’s case. “We cannot talk on recapitalisation at this stage. Right now, we are concerned about… the customers who want to get their money back and those who want to remain.”


Mr. Ogunde said that there have been meetings with the Central Bank on the matter, but he would not say what the outcome of the meetings was.“The bank has just completed its verification exercise, to know the state of the branches, and the assets of the bank,” he added.The Central Bank did not confirm whether an extension will be granted to the bank, but confirmed that the bank was yet to raise the N25 billion capital required to put the bank back on track.


“With the information we have, they have been doing a lot of things to raise the capital, but there is no information reaching the CBN confirming that such capital has been raised,” said Mohammed Abdullahi, the Central Bank spokesman.On Monday, a newspaper reported that First Inland Bank has begun moves to sell property belonging to a former governor of Enugu State, Jim Nwobodo, for failing to settle a N258 million loan he took to help in recapitalising Savannah Bank.


Depositors and shareholders of Savannah Bank, who were excited after the ruling and the bank’s licence restoration, may have to wait longer before accessing their funds, since the Central Bank has outlined conditions under which it can reopen for business.Last August, the Central Bank’s governor, Sanusi Lamido Sanusi, said even though its licence have been returned, the bank must show proof of strong financial capacity, a new business model, and foreign or local partners, to show that they are ready for business before it can extend any assistance to the promoters of the bank.


“Of course, with non performing loans, if they have collateral, we can buy the non performing loans. If they want support similar to the ones we have extended to other banks, CBN will give them all the support that is reasonable,” Mr. Sanusi said.






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