News
Banks’ boards meet over new investors
-Daily Trust
Mon Feb 7,2011
In a bid to finalize
and ratify the decisions of their managements on the new core
investors, board of directors of the five rescued banks would be
meeting this week to take final decision and signing of
Memorandum of Understanding next week. The rescued banks are:
Spring Bank, Union Bank, Intercontinental Bank, Oceanic Bank,
Fin Bank, BankPHB and Afribank. CBN had bailed out the
banks from total collapse in August 2009 with N650 billion.
Intercontinental Bank’s board met last Friday in Lagos on the
ratification of the new investor, while the bank’s management is
expected to sign the MoU with the new investor this week.
The board of Union
Bank, it was reliably gathered, would be meeting in Lagos on
Wednesday and one of the vital issues on the agenda is the
ratification of the selected core investor by the bank’s
management. It was gathered that the Union Bank management had
concluded discussions with the selected investor and is also
satisfied with the proposal to inject the bank with fresh fund
It would be recalled
that the Group Managing Director Funke Osibodu had said that the
management of the bank selected a core investor as well as a
preferred bidder and that their names would be made public in a
few weeks time. She said discussions with the core investor is
still ongoing and that a Memorandum of Understanding which would
lead to signing Deed of agreement would be signed in a few days,
adding that part of the conditions provided by the apex bank,
the Central Bank of Nigeria (CBN) must be met before the parties
reach conclusion.
“As you are all aware,
one of the conditions for core investor to come in was bringing
the bank to zero level and that is what AMCON is doing right
now, buying the bad loans and so far we have collected N239
billion under the first phase. We are still discussing and
reconciling. If we still have bad loans we will still take more
of it.” She said once the negatives are cleared, a new investor
would come in, adding that as at now the percentage of equities
to be acquired by the core investor is yet to be determined but
that the core investor would be the largest shareholder in the
bank.
The bank, it was
gathered would be signing the MoU this week once the directors
agreed with the recommendation of the management. Daily Trust
also learnt yesterday night that the board of directors of Fin
bank, Oceanic and Afribank would be meeting this week on the
same issue and that MoU could be signed this week or early next
week.
The CBN Director of
Banking Supervision, Sam Oni had last week said four of the
nine troubled banks would seal Memorandum of Understanding with
potential core investors last week, leading to their
recapitalization. “Two other troubled banks would also seal
their MoU with investors in the next two weeks,” he said
yesterday in Abuja after the Bankers Committee met to discuss
critical issues in the banking sector. Oni said: “I can confirm
to you that by the end of this week four of those banks would
have completed their details in terms of MoU that would lead to
the recapitalization of those banks.
“In a fortnight,
additional two would have also reached the stage to complete
their MoU. In other words, six banks that were considered
important in terms of their systemic weakness would have
completed arrangement towards resolving their recapitalization.
“To us that is a positive development. I can confirm to you that
there is no longer systemic risk in the banking sector.
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