Nigeria’s central bank has received bids for four of the nine lenders rescued in a N620 billion bailout last year, Central Bank Governor Sanusi Lamido Sanusi told CNBC Africa television yesterday.
Sanusi said two foreign institutions were involved in the bidding process, as well as several local banks and private equity firms in partnership with foreign banks.
“The advisers have finished analysing bids already received for four of the banks. We expect the bids for the others to have been completed by the end of this month,” Sanusi said. He gave no further indication as to who the bidders were.
According to our investigations most of the foreign investors interested in the banks are mainly from South Africa. They include Standard Bank, ABSA Group, First Rand and NEDBANK while HSBC is from the United Kingdom(UK).
A Germany-based bank, Deutsche, which was earlier speculated to show interest in acquiring one of the rescued banks have accepted financial advisory job from the CBN to one of the banks.
Domestic institutions that are interested in the troubled banks include Ecobank Transnational Incorporated (ETI), Fidelity Bank Plc and United Bank for Africa (UBA) Plc.
Five of the rescued banks which investors were speculated to be interested in include Union Bank of Nigeria Plc, Intercontinental Bank Plc, Oceanic Bank Plc, BankPHB Plc, and Afribank Nigeria Plc.
The other troubled banks are FinBank, Equitorial Trust Bank and Spring Bank.
Nigeria is in the process of setting up an asset management company (AMCON) which will purchase non-performing loans with collateral and chase the recovery of the bad loans. It will also inject funds and take equity stakes if there are unsecured loans which need absorbing.
Sanusi said much work had been done in the last month to value the bad loans and gauge how much of them are unsecured.
He said a recommendation had been made to the president on the constitution of AMCON’s board and was confident that once that was approved, deals to buy non-performing loans from the rescued banks could quickly be announced.
“I don’t see any reasons why AMCON can’t take these decisions in the next few weeks,” he said, but added that the recovery of bad assets would take much longer.
“As far as the details are concerned, it will take a year to go and audit every asset, to do every valuation, do legal due diligence, set up systems and processes,” he said.
The central bank has prioritised getting credit flowing again in sub-Saharan Africa’s second biggest economy after last year’s $4 billion bank bailout.
Interest rates have been on hold at 6.0 per cent for more than a year and inflation is in double digits.
Sanusi said he would be satisfied with a headline inflation rate of 9.0-9.5 per cent and that creating economic growth was his priority. Consumer inflation eased to 10.3 per cent year-on-year in June, its lowest in more than two years.
“When you have a country of 150 million people with 70 per cent below the poverty line, it is extremely important … to provide a stable environment to ensure growth of the economy is not hampered by some desire to pursue a very low single-digit rate of inflation,” Sanusi told CNBC. (Reuters)