CBN receives bids for six rescued banks

2010-09-23
THE PUNCH Newspaper

The Central Bank of Nigeria has received bids for six of the banks it bailed out last year, the apex bank Governor, Mr. Lamido Sanusi, has said.



According to Sanusi, who spoke in an interview with CNBC Africa Television on Wednesday, the CBN plans to make an announcement on the banks by ”late September, or the first or second week of October.”



He explained that the apex bank would sell stakes in the 10 banks it rescued last year, when it fired top managers and injected N620bn ($4.1bn) of capital to ease a debt crisis that threatened to cripple the financial system.



The rescued banks are Afribank Nigeria Plc, Finbank Plc, Intercontinental Bank Plc, Oceanic Bank Plc, Union Bank Nigeria Plc, Bank PHB Plc, Spring Bank Plc, Equatorial Trust Bank Plc, Wema Bank Plc and Unity Bank Plc.



Standard Bank Group Limited, FirstRand Limited, and Old Mutual Plc, three of the largest financial institutions in South Africa, said in January that they might be interested in buying stakes in Nigerian banks. Fidelty Bank Plc and Ecobank Nigeria Plc also said they wanted to buy Afribank Plc.



In June this year, Sanusi said he expected three international lenders, a number of private-equity firms and local lenders to submit their offers by mid-July.



The interested parties are undertaking ”detailed” due diligence, he said.



The central bank said last October that local banks could only buy a 20 per cent stake in the rescued banks.



Meanwhile, the average maximum lending rate in the economy increased to 22.31, per cent, from 22.27 per cent in July, the CBN has said.



The CBN, which noted, in its Monetary Policy Committee communiqué, released on Tuesday, that retail lending rates were still relatively high, said average prime lending rate declined to 16.89 per cent in August 2010, from 17.40 per cent in July.



Experts have, however, said that, with the increase in the Monetary Policy Rate, lending rates are expected to rise further in the economy.



The MPR is the anchor rate at which the CBN lends to the Deposit Money Banks.



According to the CBN, the weighted average savings rate dropped to 1.41 per cent in August 2010, from 1.62 per cent in July, corroborating depositors‘ complaints of low saving incentives.



It said the consolidated deposit rates declined to 2.27 per cent in August 2010, from 2.40 per cent in July, adding that the spread between the average maximum lending rate and the consolidated deposit rate rose marginally to 20.04 per cent in August 2010 from 19.87 per cent in July.



The Monetary Policy Committee, however, noted that the naira exchange rate had remained stable in all segments of the market during the review period, reflecting increased confidence and the efficacy of the current exchange rate policy stance.



It said that the relative stability in the foreign exchange market was likely to be sustained in the near term, noting that the committee would continue to monitor developments in the market to ensure that measures were taken to eliminate speculative demand and exchange rate volatility.



Sanusi had also said that the apex bank will avoid any ”shotgun” sale of rescued banks and might take the rest of the year to complete deals with prospective international buyers.



”The process may take until the end of the year, so it is not a shotgun marriage as these things happen as they come,” he was quoted as saying earlier this year.



 

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