LAGOS, Aug 17 (Reuters) - Nigerian Central Bank Governor Lamido Sanusi said on Monday a 400 billion naira ($2.6 billion) capital injection to five ailing banks would be convertible into some form of Tier 2 debt or preference shares.

"We put the money in as a convertible loan , We will probably convert this into either some kind of Tier 2 debt or some kind of preference shares," Sanusi told CNBC Africa television.

"Our intention is to find investors and to get the government out of these banks as quickly as possible, and if necessary simply remain in terms of provision of liquidity support but not equity," he said.

The regulator injected the capital into Afribank (AFRB.LG: Quote), Finbank (FIBP.LG: Quote), Intercontinental Bank (INBK.LG: Quote), Oceanic Bank (OCBK.LG: Quote) and Union Bank (UBNP.LG: Quote) on Friday in an effort to prevent a systemic banking crisis.

Shares in the five institutions were suspended from trading on Monday to prevent them going into free-fall, while the naira currency NGN= weakened further as uncertainty put foreign banks off trading with their Nigerian counterparts.

But analysts said the move to clean up the banking sector -- which many foreign investors see as long overdue -- would be good for sub-Saharan Africa's second-biggest economy once the dust had settled.

"In the short to medium term we'll see investors and creditors have greater confidence in Nigeria. The potential remains there, the fundamentals remain there," Sanusi said.

"We have a country of 150 million people, 23 million bank accounts, oil prices are going up, our foreign reserves are not depleting any more at the rate at which they were. We lost about $2.1 billion a month but by July they have held firm," he said. (Reporting by Nick Tattersall and Chijioke Ohuocha; Editing by Andy Bruce)

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