By Stanley Opara

Monday, 6 Dec 2010

Stakeholders in the Nigerian financial sector have said that the value of the rescued deposit money banks depends on the performance of the Nigerian economy.

They, however, said though the closure of deals for the sales of the banks to core investors might not be forthcoming, the values of the banks were in no way threatened.

The Head, Corporate Affairs, Union Bank, Mr. Francis Barde, who spoke to our correspondent on Saturday on the telephone, said the value of the rescued banks could either appreciate or depreciate depending on the overall performance of the economy.

He said no scenario was static and as such the major emphasis by the banks and their potential investors should be to reach a good deal.

According to him, the core of the matter is to get the process right and ensure that problems in whatever form, do not arise after deals are concluded.

The Central Bank of Nigeria salvaged nine banks believed to be dangerously undercapitalised in a $4bn bail-out last year and has since been seeking new investors to recapitalise them.

The Head, Corporate Affairs of another rescued bank, who pleaded anonymity, told our correspondent that his bank‘s performance since the CBN bail-out had been optimal.

According to him, if the country’s economic indices are favourable and remain favourable, the worth of the rescued banks may not drop as has been envisaged in some quarters.

He said the banking sector remained a cardinal part of the Nigerian economy, and would not continue to sink while the nation‘s economic performance was above par.

According to him, investors‘ judgement about the economic viability of the banks, remains an issue that cannot be treated in isolation of the country‘s economic performance.

However, a text message from the Corporate Affairs unit of Intercontinental Bank Plc on Saturday, quoted the Group Managing Director of the bank, Mr. Lai Alabi, as saying, “We are an international bank and will remain an international bank irrespective of whatever arrangement we find ourselves after the ongoing recapitalisation exercise.

“But our ultimate goal now is to conclude our recapitalisation exercise.”

Source: Punch