28th June, 2010
Nigerian Central Bank Governor Lamido Sanusi said he expects three international lenders, a number of private equity houses and local lenders to submit offers for banks bailed out by the Central Bank by mid-July, Bloomberg reported today The interested parties are undertaking â€œdetailedâ€ due diligence, the Central Bank governor said.
Nigeria imposed new management and injected funds into eight banks last year in a bid to nurse them back to health and find potential buyers.
â€œWeâ€™ve got three international banks that have remained in the serious running to acquire banks,â€ Sanusi said in an interview yesterday in Basel, Switzerland.
â€œThereâ€™s also a number of local banks and private equity firms. By the middle ofÂ AugustÂ we should actually have clear visibility on at least five of the banks.â€ The financial crisis left the countryâ€™s lenders with toxic assets of about $10 billion, New York-based Eurasia Group estimated a year ago. The central bank fired the top managers of eight of the countryâ€™s 24 lenders and gave the industry an injection of 620 billion naira ($4.1 billion) to stem the decline.
â€œSecuring a future for Union Bank, Oceanic, Intercontinental, PHB and Afribank is the priority as these banks are the most â€œsystematically importantâ€ to Nigeria,â€Sanusi said.
The Central Bank is waiting for presidential approval for a law that will create the Asset Management Corp. of Nigeria, a government entity that will buy bad debts from the banking sector, using funds raised through government-guaranteed local bond issuance.
The bonds will be issued on a deal by deal basis and the presidential approval is expected early next month, Sanusi said.
Sanusi said he sees no reason now for a change in the benchmark interest rate. â€œA rate cut at this particular moment in time doesnâ€™t appear to be necessary
â€œThere is no compelling imperative at this point to review the interest rate stance,â€ he said.
Sanusi said the next monetary policy meeting will take place on July 5.