CBN to sell five bailed banks 100% to foreign investors
Headlines Aug 28, 2009 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 buy 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.
http://www.vanguardngr.com/2009/08/28/cbn-to-sell-five-bailed-banks-100-to-foreign-investors/

I hope CBN can provide the names of the people behind the 'foreign investors'.

Very soon, they will sell Nigeria as a whole.

why sell 100%?

So they want to sell 100% of the 5 biggest banks? Why not add our "independence certificate"?

Will even like to know how the selection of the investors were made and who selected them and what were the criteria for selection?

Why is Vanguard misquoting the Guy? He said foreign banks not foreign investors. And why is Vanguard beating around the bush? name the people.

And I will like to know why Vanguard refuses to admit they lied about the so-called deputy governors who were fired? it has been confirmed they were only directors and all the directors will be changed.



Here is the REAL article for REUTERS

* Growth seen accelerating to double digits from 2010

* Foreign banks can take 100 pct stake in rescued banks

* Bank earnings seen strengthening

(Adds banking comments from Sanusi interview)

By Carolyn Cohn and Sujata Rao

LONDON, Aug 28 (Reuters) - Nigeria 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, Central Bank Governor Lamido Sanusi said on Friday.

Addressing international banks, lenders and rating agencies in London, Sanusi said sub-Saharan Africa's number two economy was likely to expand 5 percent 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 percent 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 400 billion naira ($2.6 billion) five commercial banks and sacked their senior management, saying lax governance had left them so weakly capitalised that they posed a systemic risk.

Sanusi told the London conference -- called to reassure counterparty banks and foreign investors about the bailout -- that he would not stand in the way of any foreign banks taking a 100 percent stake in the five Nigerian institutions.

The regulator has said Afribank (AFRB.LG: Quote, Profile, Research), Finbank (FIBP.LG: Quote, Profile, Research), Intercontinental Bank (INBK.LG: Quote, Profile, Research), Oceanic Bank (OCBK.LG: Quote, Profile, Research) and Union Bank (UBNP.LG: Quote, Profile, Research) will be run as going concerns until new investors can be found to recapitalise them.

UK bank Barclays (BARC.L: Quote, Profile, Research) has been named by analysts as possibly being interested in buying a Nigerian bank. Sanusi declined to comment in a separate interview with Reuters Television. [nLS72160]

Nigeria will begin talks with potential investors in the five rescued banks from late next month, Sanusi said.

The banking sector is key to Nigeria's economic prospects.


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 NGN= lower and triggering a stock market sell-off. .LAGLG.

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. [ID:nLL520570]

But Nigerian financial markets have since stabilised and international investors have welcome Sanusi's actions as the beginning of a long-needed clean-up of the banking system.

"Hedge funds, asset managers, corporates all have an interest in Nigeria, and overall the reaction to these reforms have been positive," Razia Khan, head of Africa research at Standard Chartered, said in a presentation in Lagos this week.

Sanusi said the country's banks may see strong earnings growth by the end of the year as there would not be losses from hidden non-performing loans, for which banks have been making provisions.

He said the S&P downgrade was a big surprise.

"At a time when we tried to increase transparency and disclosure its a very big surprise to get a downgrade," he said.

"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 percent this year, but analysts in a Reuters poll this week forecast 3.6 percent growth. [nLP325443]


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 1.6 trillion naira ($10.6 billion) borrowing needs.

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.

http://in.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idINLS2802920090828?pageNumber=4&virtualBrandChannel=0

@naijatoday

Quite interesting.Still shows that there is some truth behind the story.

A schoolkid could have predicted a downgrade after this mess but Sanusi is surprised  I guess he expected international acclaim.

naijatoday:


He said the S&P downgrade was a big surprise.

"At a time when we tried to increase transparency and disclosure its a very big surprise to get a downgrade," he said.

"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.

SapeleGuy:

A schoolkid could have predicted a downgrade after this mess but Sanusi is surprised  I guess he expected international acclaim.

I think S & P 's reason for the downgrade was a surprise.

@Naijatoday

Please can you explain to me in a simple language the difference between Foreign investors and Foreign Banks (belonging to foreign investors?)

romeo:

@Naijatoday

Please can you explain to me in a simple language the difference between Foreign investors and Foreign Banks (belonging to foreign investors?)

If you follow the Vanguard story that has been posted here they are claiming foreign investors (private) will be used as  fronts for Nigerians who were not happy with soludo's consolidation to buy the banks. If it a Foreign bank, will it not list it in its report that they bought a Nigerian bank and the percentage they bought?  I do not think a foreign bank will work will Nigerian investors to buy a bank and lie to their own regulator that they bought 100% of a bank.

I was only saying there is a difference based on the Vanguard's claim that it is Nigerians (or northerners) will buy the bank useing foreign investors.

naijatoday:

If you follow the Vanguard story that has been posted here they are claiming foreign investors (private) will be used as  fronts for Nigerians who were not happy with soludo's consolidation to buy the banks. If it a Foreign bank, will it not list it in its report that they bought a Nigerian bank and the percentage they bought?  I do not think a foreign bank will work will Nigerian investors to buy a bank and lie to their own regulator that they bought 100% of a bank.

I was only saying there is a difference based on the Vanguard's claim that it is Nigerians (or northerners) will buy the bank useing foreign investors.

Thanks for the clarification very simple too

Quite obvious the whole saga was leading to all this. 
Now he want to sell 100% to foreign investors . . . . .now why am I not suprised!

erm, whats the result of the audit of the 11 remaining banks?

lol Proudly9ja

which of the banks do you want to buy?

proudly9ja:

erm, whats the result of the audit of the 11 remaining banks?

The audit is to be completed by the end of August

Now sanusi is movin too fast 4 my likin:he identified d rot in our bankin system,a gud thing.he fished out #400billion frm d thin air 4 dia bailout,a gud thing too.but invitn foreigners to acquire d banks?for God's sak d guy's barely 3weeks in d saddle.someone should restrain this nigerian version of usain bolt b4 he sells us al off!

Don't worry our legal system will put a stop to this.

I have said it before and I will say it again loud and clear, the the job of a CBN governor is NOT to act in a DRAMA.

Whether or not LAMIDO want's it or think it will happen, all he is doing is drama and inadvertantly causing more damage than good.

In international circles, it is (All) Nigerian banks that are in trouble because the regulator did not pick those up (with the 5 banks)

It is a FIRE BRIGADE MENTALITY with this CBN Governor, he is putting fire in the house to put it out later at much greater costs. For all the alledge wrongdoing of Soludo, he is always giving confidence to the market. And the difference between a good and bad market is confidence. ( overconfidence in self regulation is what creates problem for the banks to lend mainly for the purchase of shares).

If all those CEO goes down so will a lot of CBN auditors and regulators.

LAMIDO may be a banking guru superstar but he has NO WISDOM or the political skill of modern day Central banker's governor need to lead. His job is to deal with issues without creating noises in transition

In my own opinion he is just showboating to act as if he has actions. As you can see it is backfiring.

And what is all these nonsense about selling banks to foreign investors or foreign banks (foreign is good mentality- OPERATION REBARNDING NIGERIA), it is like everything he is doing confirms those rumours in vanguard newspaper of March this year, like he has a preconceived ideas.

Did anyone remembr his confirmation in the senate, he was like the usual
'bow and go'. Equally I am not suprised because our senate comprises of majority of touts who should have been bus conductors or drivers at motor parks and garages.

Even if foreign banks or foreign investors buy the banks, they will not only take out 100% of their profits but do whatever it's in their best interest which will not necessary and certainly be in Nigeria's best interest. And also because we have policy reversal by diffrent administation they will never plan long term

The whole episode in my own opinion is FAILURE OF REGULATION AND EXAMINATION BY CBN, AND MOST IMPORTANTLY BY THE GOVERNMENT TO SET DIRECTION FOR THE CRITICAL AREAS BANK SHOULD LEND RATHER THAN PAPER TRADING(STOCKS ETC).

LAMIDO just want to shout his arrival and the power he has as CBN Governor has gone to his head . period.

You guys don't even understand the bottom facts of this. There is too much money, ala (banks) in the hands of Southerners. The omen is not good for the northerners that want to keep nigeria ONE at all cost. Too much money and still growing in the hands of Southerners is a threat to the northerners and their nigeria as a whole which they so much want to keep as ONE. Too much money in the hands of Southerners can be used in an effective way to devastate and bring the country down and divided at a point. The northerners are set to curb this and it will not end with just the 5 banks they have started with. Watch out as the script goes on.

fyneguy:

lol Proudly9ja

which of the banks do you want to buy?

lol, this guy, u don find me reach here,

Na the one wey them dey call 'wonder bank' na im I wan buy!

Olong:

Now sanusi is movin too fast 4 my likin:he identified d rot in our bankin system,a gud thing.he fished out #400billion frm d thin air 4 dia bailout,a gud thing too.but invitn foreigners to acquire d banks?for God's sak d guy's barely 3weeks in d saddle.someone should restrain this nigerian version of usain bolt b4 he sells us al off!

Na u go buy the banks? or you want the same corrupt politicians to take over the banks to better help them in concealing their embezzlement?
If there are foreign banks or investors, who are willing to invest their money in our banks, then I think it should be welcomed. Unlike the MTNs who have been using local sourced funds and siphoning the gains to SA.
The current laws allow any entity (including the likes of bin Laden) to own an entire bank by proxy. I dont see how BoA or HSBC owning a bank is any worse.

@ Topic, this is madness.

^becomerich which party will you be your preseident with . . . . PDP, AD, MMM, PSP . . . ? e.t.c
I hope you are just not typing here "I want to be president "
when the days come, will we see your name on the ballot box ?
As I said before you have my vote 100%

Does anyone know how to obtain the geographical spread of shareholders within the five banks (Union, Intecontinental, Afribank, Oceanic and FinBank).

This is so that after the dust has settled we can get a picture of what the ownership structure becomes like.

Because frankly, I sincerely think Sanusi is following a Fulani Northern agenda, considering his past utterances before he was the CBN Governor.

1. Is this so called foreign investors not stooges of Northerners that are trying to use foreigns as their proxies.

2. Where did the 400Billion naira used to bail out the banks come from.

3. Vanguard carried a news report in March that some people were trying to take over the banks by first devaluing them and then destroying them in the eyes of the public and then taking over them.

4. It is an open secret that a lot of northerners that embezzled nigerian money have a lot of that money outside of the country and that those monies run into billions of dollars. Hence it would not be a big deal for those northerns to use those money to try to buy into or get complete control of the above mentioned banks.

5. Unity Bank is worse than even the banks which Sanusi have sacked their CEOs yet we are yet to hear anything being done to Unity Bank.

6. I initially supported Sanuis, but the more i am seeing his past and present utterances and statements and considering that he is a so called "islamic scholar" (meaning he is completely capable of being totally irrational) the more i realise that Sanusi might be following a northern agenda after all.

7. He is reported to be an open and blunt Fulani nationalist, hence it does not take a rocket scientist to realise that[b] if it smells like a rat, sounds like a rat, looks like a rat, behaves like a rat, talks like a rat, eats like a rat , then it most probably is a rat.[/b]



Does this not all sound similar to what Sanusi has done and is also about to do


Those who are interested in the March report carried by Vanguard newspaper can check this link here:

http://www.vanguardngr.com/2009/08/26/group-plots-takeover-of-five-top-banks/

[url]http://www.proshareng.com/admin/upload/reports/Vanguard%20March%2023,%202009%20-%20The%20Plan%20to%20take%20over%205%20banks.pdf[/url]

i wonder why its only vanguard that has been harping over the so called northernisation plot

oyb:

i wonder why its only vanguard that has been harping over the so called northernisation plot

- Good observation.
- Nevertheless we both know that a scandal does not always break as a national headline, in most cases it is usually an exclusive.
- What was reported by Vanguard is happening exactly the way it was reported.
- That is enough reason for it to be investigated and for Sanusi to be held accountable.
- Even if Vanguard is not saying the truth, the events from Sanusi and his utterances calls for suspicion. How come other banks are not yet exposed, what happened to Unity Bank.
- How come he is already willing to sell the banks (PLC companies  ) to foreign investors  wen nigerians are full capable of buying up shares in the same banks.
- Why does he need to sell private properties to other foriegn investors even though the aforementioned shareholders never gave him such an authority to do so on their behalf.
- Does it not sound like robbery, to nationalise something within a month and then seek to sell it off to other private hands  after pumping in 400billion naira of so called public money (jury is still out on where he got this 400billion naira from).
- What is the current ownership structure of the so called failed banks and what is going to be their ownership structure later on.
- What is the current geo-political spread of the ownership structure of the so called failed banks and what is going to be their ownership structure later on.
- Public parastals are part of the debtors of the so called banks, does it not make sense for those public parastals to pay their debts and thus ensure that those banks don't fail instead of pumping in additional public money.

@oyb

Yes we disagree seriously on issues  (infact i know u would want to slit my throat if u have the chance for yabbing allah and mohammed) nevertheless, even u would concur that something seriously fishy is going on as regards Sanusi's actions. Considering that his so called sanitization has been selectively focused on certain banks even though its common knowledge that other banks are worse e.g. Unity Bank, Savannah Bank, Societie General.

I was a supporter of Sanusi before, however the evidences shows that he is to be strongly suspected and stopped if possible so that he does not over step his bounds,

I personally have heard reports that Soludo was unfavourable to northerners because his policies were not favourable to Black Market currency operators (Guess what Sanusi changed the policy hence it now favours black marketers  ). So it does not take a rocket scientist to realise that something tribalistic and imperialistic is going on.

Yes we disagree seriously on issues Grin (infact i know u would want to slit my throat if u have the chance for yabbing allah and mohammed) nevertheless, even u would concur that something seriously fishy is going on as regards Sanusi's actions. Considering that his so called sanitization has been selectively focused on certain banks even though its common knowledge that other banks are worse e.g. Unity Bank, Savannah Bank, Societie General.

why are you including dead banks in your list?

when access bank and gtb were taking debtors to court, why were these 'certain' banks silent?

even now i am hearing rumours that zenith bank is taking over some or otedola/zenons real estate properties over non performing debt.

thats what professionals do. unless the loans the five banks gave out were so paddy paddy that nothing can be done again.

i have said it over and over again - my wife uses intercontinetal - the bank sent out an SMS raising the minumum account balance to 10k. they had a entire weekend in which NO ONE could withdraw drom their atms. when their attempt to force a minimum deposit increase backfired they went the promo route.

all this noise is because sanusi is a northern muslim. if soliudo had been a northern muslim, you lot would have been shouting the same things during the consolidation exercise - they wasnt to Islamize /northernise the banks , the want to force all the big banks to become community banks.

going by the noise over the 'plot' why did erastus and co not aggressively pursue their debtors?

Are all these Vanguard 'Northern Agenda' articles not from the same Omoh Gabriel?
any corroborating story from an independent source?

Spreading rumors such as these is what is actually damaging the sector, and not the actions of the CBN