By Ademola Alawiye

Monday, 10 Jan 2011

Financial analysts have urged the Central Bank of Nigeria to meticulously evaluate core investors that are bidding to buy the rescued banks that failed the joint stress test conducted by the CBN and the Nigerian Deposit Insurance Commission.

Analysts, who spoke in an interview with our correspondent on Friday, said that the apex bank should carefully screen bidders interested in buying the banks to avert future problems relating to corporate governance.

The Managing Director, Compass Investments and Securities Limited, Mr. Emeka Madubuike, said, the CBN should look out for people that would add value to the banks.

Madubuike said, ”The whole essence of having core investors is to bring stability into the banks. In general, the CBN should watch out for bidders that will add value to the banks. Apart from financial value, they must be able to add technical value and improve on the shareholders’ value too.”

Speaking in the same vein, the Managing Director, Sotice Investment Company Limited, Mr. Adedayo Toluwase, said, ”It is necessary for the CBN to assess critically the bidders that will be buying these banks. The major problems the banks had were problems of corporate governance and risk management.

”If we don‘t want a repeat of what happened last two years, then those that will be saddled with the responsibilities of running the banks should have expertise in these areas, with proven integrity.”

The CBN Governor, Mr. Lamido Sanusi had said that it received good bids for some of the rescued banks put for sale but it would not just sell the banks without due consideration so as to protect the interest of shareholders.

Sanusi said, ”A number of foreign banks and private equity companies have expressed interest in the banks. We are being savvy with the biddings to protect shareholder value and therefore not every bid would be accepted.

”Some of the bids are very good; some are acceptable given where we stand. Given that we have the Asset Management Corporation of Nigeria and they can recapitalise the banks, we can get a better deal, so we don‘t have to accept every offer”

South Africa‘s FirstRand Bank Limited, Standard Bank Plc and a group of local banks are among banks that have shown interest in investing in the rescued banks, according to the regulator.

Source: Punch