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Author Topic: CBN to sell five banks 100% to foreign investors  (Read 1882 times)

Peter B

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CBN to sell five banks 100% to foreign investors
« on: August 28, 2009, 09:20:20 PM »
By Omoh Gabriel with Agency report
CBN Governor Sanusi Lamido Sanusi said in London yesterday that the apex bank was ready to sell Union Bank, Intercontinental, Oceanic, Afribank and FinBank, 100 per cent to foreign investors.  But one of the foreign investors who spoke to Vanguard at about 8 pm yesterday on phone from London said that a pre-selection of the foreign investors was done by the CBN in July even before the announcement of August 14.

He stated that at the time of speaking with the paper the CBN team was meeting with each of those pre selected foreign investor whom he described as representing the interest of some powerful political power brokers in the country.
Sanusi who was quoted by Reuters while speaking in London at the conference the CBN governor called to reassure counter-party banks and foreign investors about the bailout said that he would not “stand in the way of any foreign banks taking a 100 per cent stake in the five Nigerian institutions”. The CBN also said that the five banks will be run as going concerns until new investors can be found to recapitalise them.
According to Reuters ,, the CBN governor said that “The banking sector is key to Nigeria’s economic prospects and that the nation will see economic growth of five percent this year, rising to double-digit rates from 2010 as its banking sector strengthens again after a $2.6 billion bailout.

Addressing international banks, lenders and rating agencies in London, Sanusi said that Nigeria economy was likely to expand 5 per cent in the second half of 2009 after growing at a similar pace between January and June. “I have no doubts that by 2010-2011 we will be looking at double digit growth in Nigeria. We were growing at 6 per cent without electricity, without peace in the Niger Delta,” Sanusi said, referring to unrest in the country’s oil heartland. “We are a country of 150 million people, but with only 23 million bank accounts. So there is a lot of room for growth.”

The Central Bank two weeks ago injected N400 billion into five banks and sacked their senior management, saying lax governance had left them so weakly capitalised that they posed a systemic risk.

According to him private sector credit outstripped the entire spending of the country’s federal, state and local governments last year and this year banks are expected to provide much of the government’s estimated N1.6 trillion borrowing needs.

Sanusi’s bailout, just two months after he took office at the helm of the regulator, shocked corporate Nigeria and initially panicked financial markets, sending the naira currency lower and triggering a stock market sell-off.  S&P cut Nigeria’s speculative sovereign long-term foreign currency credit rating one notch to B-plus from BB-minus last week, citing the costly bank bailout and falling oil revenues.

“We have peace in the Niger Delta, inflation has been coming down. If the downgrade had come 3-4 months back it would have been more understandable,” he said.

Before the bank bailout he forecast that Nigeria’s economy would likely expand by 5 per cent this year, but analysts in a Reuters poll this week predicted a  3.6 percent growth. He told the London conference that non-oil GDP growth should be “robust” at above 6 percent this year, and projected an inflation rate of 9 percent at the end of the year.

Nigeria’s consumer inflation dipped to 11.1 percent year-on-year in July from 11.2 percent the previous month. Sanusi cut interest rates to 6 percent from 8 percent in July, following his first monetary policy meeting as governor. He also said Nigeria would get $2.8 billion in special drawing rights from the International Monetary Fund this year”.

It will be recalled that on March 23 this year Vanguard reported that Anti consolidation forces have regrouped with the hope of dissembling the banks and forcing a take over of the top five banks in the country. The grand plan by the group is to cause panic and uncertainty in the industry and make the target banks look unsafe for depositors.

Their aim, Vanguard gathered, is to cause loss of public confidence in the banking industry and compel the Federal Government to move in by injecting funds. Further, they ultimately plan to instigate government to take equity holdings in the targeted banks.

Vanguard investigations revealed that the group at work is made up of former bank owners who lost out during the consolidation exercise, a powerful clique in the present government, and some aggrieved persons in three of the six geopolitical zones in the country who felt left out in the consolidation exercise.

Presidency sources disclosed that those who felt left out in the consolidation exercise are grieved and are up in arms to recoup what they felt they lost during Obasanjo years.

Part of the plan hatched by the group is to ensure that incumbent Central Bank governor, Professor Charles Soludo does not get a second term. The plan is also to ensure that what ever gains that consolidation had is discredited. This it was learnt was meant to force the President to act quickly in matter  of   appointment of a successor to Soludo as they anticipate that the president’s slow move may scuttle their dreams and cause the renewal of Soludo appointment for a second term.

The group second game plan is to make Nigerian banks look un safe in the eye of the banking public. They have perfected their game by spreading rumour that some categories of banks are unsound and are on the verge of collapse.

The group is using this means to make depositors panic and undertake massive withdrawal of funds from the targeted banks in attempt to cause liquidity problem in the bank. In that state they hope to cause a take over by the government which may  a stake in the bank and later sell to these privileged group who may be appointed in the interim into the board of these banks.


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Re: CBN to sell five banks 100% to foreign investors
« Reply #1 on: August 29, 2009, 10:24:02 AM »
i foresee danger for the nigerian economy,i know we need foreighn investors,but that doesnt mean we should sell them the soul of our country.i dont want to believe this news report.the new cbn governor should be more cautious.