[size=14pt]CBN: Shareholders Now to Recapitalise Rescued Banks[/size]

By Emele Onu, 07.16.2010

The Central Bank of Nigeria (CBN) has enhanced the participation of shareholders in the recapitalisation of  rescued banks by bestowing on them the power to midwife the process.
They would also take the final decision on who invests in the financial institutions.

With this development, the apex bank has heeded to the wishes of the shareholders, who have been clamouring that they be allowed to recapitalise the banks.

Addressing stakeholders of the rescued banks in Abuja yesterday, CBN Governor Sanusi Lamido Sanusi,  according to a statement made available to THISDAY, said the apex bank would not usurp the rights of shareholders.
He assured them that the final decision on recapitalisation rests with them.

Present at the meeting which was chaired by Sanusi were the boards of directors of the rescued banks, their management as well as shareholders. The meeting was the second in the series of dialogue initiated by the CBN  to ensure effective collaboration in the process.

Sanusi was also said to have reassured them that having secured the depositors’ fund with the reform programme, the focus of the CBN now is to salvage some value for the shareholders.

He made it clear that the CBN would not sell the banks, as it is not the business of the banking watchdog to do that. The CBN, according to Sanusi, only recommended some reputable financial advisers who are working with the board and management of the banks to source and negotiate with any of such investors.

He emphasised that the process of repackaging the banks is being driven by their board, some of which have held discussions with strategic partners, without direct involvement of the CBN.

“The Governor reassured the stakeholders that the shareholders would definitely play an important role in the recapitalisation exercise and that the process of giving value to their shares is already assured with the coming on board very soon of the Assets Management Corporation Of Nigeria, (AMCON),” the CBN statement read.

“On the issue of on-going litigations against the CBN, it was noted that a few individuals took the action without the consent of the seven zonal shareholders associations and that these few individuals who went to court only did so for personal reasons, as such individuals do not represent the opinion of the shareholders," it added.

The CBN, however, said that if the on-going process to recapitalise the affected banks is not successful, the apex bank would have no other option than to go for liquidation as provided by the existing legal framework.

Sanusi noted that liquidation and nationalisation are not desired options for the banks, stating that he is convinced that fresh injection of capital through strategic partnership remains the best approach.

The stakeholders, according to the statement, commended the CBN for reaching out to the shareholders and urged that the two options of liquidation and nationalisation should not be considered.

They also recommended that the CBN should go for the option that protects both the depositors and the shareholders and promised to consult with other shareholders to withdraw all court cases. Besides, they advised that the new management put in place by the CBN should be communicating with the shareholders regularly.

The CBN had some months ago engaged the boards of the banks and their major shareholders to a similar meeting, during which it urged them to support the recapitalisation programme or risk losing their investments.

The CBN governor has said repeatedly that the recapitalisation programme is in the interest of local investors who stand to regain their lost investments in the organisations after their recapitalisation, the recovery of reasonable portion of bad loans and the return of the banks to profitability.

AMCON set to take off in about a fortnight, after presidential assent to the bill, it is believed that all issues surrounding the recapitalisation of the banks would be resolved.

The CBN intends to clear $10 billion (about N1.5trillion) of bad loans from the banking system by the end of this year, in support of the recapitalised banks.

Sanusi said recently that bids on the banks would be released by September or October this year, adding that four international banks were among the likely bidders.
He said bids on the banks are to close by the end of July.

Sanusi recently said he is optimistic about the rescued banks’ recapitalisation. “Foreign investment in Nigeria is expected to rise as investors bet on rising oil prices, increased Nigerian oil production, and improved regulation of the banking sector," he stated.

The rescued banks are those the monetary authority found in “grave financial situation” following the joint examination of the CBN and the Nigeria Deposit Insurance Corporation (NDIC) and the release of the findings on August 14 and October 2 last year. The banks are Intercontinental Bank, Afribank, Oceanic Bank, Finbank, Union Bank, Bank PHB, Spring Bank and ETB.

http://thisdayonline.com/nview.php?id=178453

Yeap!! Finally finally! It took them almost a full year to simply do what is right. Thank God for Jonathan and his crew!!

All Sanusi wanted(IMO) was to sell the banks to predetermined foreign fronts. That is definitely off the cards now ! Yeah!!

PapaBrowne:

Yeap!! Finally finally! It took them almost a full year to simply do what is right. Thank God for Jonathan and his crew!!

All Sanusi wanted(IMO) was to sell the banks to predetermined foreign fronts. That is definitely off the cards now ! Yeah!!

proof ?

Watching and waiting

mbulela:


Yeap!! Finally finally! It took them almost a full year to simply do what is right. Thank God for Jonathan and his crew!!

All Sanusi wanted[b](IMO)[/b] was to sell the banks to predetermined foreign fronts. That is definitely off the cards now ! Yeah!!

Mbulela

Take a chill pill! Proof?? for his opinion?
Its his opinion, ok? I'm sure he is entitled to one.

Hmmmmmmmm. Sanusi AKA FATHER U-TURN .

PapaBrowne:

Yeap!! Finally finally! It took them almost a full year to simply do what is right. Thank God for Jonathan and his crew!!

All Sanusi wanted(IMO) was to sell the banks to predetermined foreign fronts. That is definitely off the cards now ! Yeah!!

Very correct, probably to Arab interests. He wanted to take the financial sector out of the southerners.
He made a statement that the banks capitalization was made when the North was not ready, hence the dominance of the South in the banking sector. What does that statement mean?

mbulela:

proof ?

Proof Proof
You shamelessly ask for proof as if you have just landed from outer space
Even last week, Sanusi was looking for "buyers" for companies he does not own, and his parasitic forefathers could have never dreamt of owing. He spoke against family, personal, and group owned banks for the past one year, and you're here asking for proof.
I have proof for you alright, it called Nairaland--just go back a few weeks or months and you will have all the proof you need to show that Sanusi and people like you who support him for whatever reason have been wrong from day one.

Q. Were Nigerian banks declaring paper profits and sitting on a boatload of bad loans?
A. Yes. So what's with all this 'I told you so' people are fronting? Sls didn't have to sell any bank,in my opinion he should've just waited for some of the banks to go bankrupt. I wonder how many would now come here to shout about his so called northern agenda. The north isn't bloody interested in any bank,how do i know this? Running a bank,profitably at least, is HARDWORK- Something the average hausa man loathes. So i don't get where papabrown gets all these hashed theories from really. And for the bloke who claims stocks will rally by at least 50% come dec, put your money where your mouth is and i guarantee if you don't buy intelligently,you'll wind up with NO chair when the music stops.

^^^^
Do you remember what they call it in basic logic class when some asks a wrong question and then proceeds to answer that wrong question so clearly that it confuses the issue?

That the banks were bloated, cooking papers, owned by worthless shareholders, stealing left and right are all allegations made by Sanusi to take over the banks. The issue here is that after more than 1 year, and after so much maligining of the sharholders and owners of the banks, Sanusi has been forced to give shareholders the opportunity to re-capitalize these banks. This should have been done first.

Ok it is now more than a year SLS took over the helms of the CBN.
What we have is one step foward one step back which will lead to confusion, mismanagement and stagnancy.
Just like NEPA, Nigerian airways, NITEL, Ajaokuta all typically Nigerian.

It was easy for SLS and others to critisize the giant strands made by the previous CBN administration even with all its imperfections.
It is just a matter of time and people r going to recognise.

@naijaking- when someone makes an allegation,what do you do? You refute it right,with evidence. Let's follow your line of thought here- Sls alleges banks are in poor state,banks say No we're not. He says special audit,banks are REVEALED i.e PROVEN to have non-performing assets that have ERODED shareholders funds. People can't seem to grasp the quantum of the loss here. Are you in the financial industry or just a keen observer making input? Should he have let the banks continue window-dressing and carrying bogus share prices cos most investors were making 'awoof' profit? I'm sure this is the grouse most Nigerians have with the man,he made us lose money. But remember we were just sharing out our capital not enjoying Roi.

darqly:

@naijaking- when someone makes an allegation,what do you do? You refute it right,with evidence. Let's follow your line of thought here- Sls alleges banks are in poor state,banks say No we're not. He says special audit,banks are REVEALED i.e PROVEN to have non-performing assets that have ERODED shareholders funds. People can't seem to grasp the quantum of the loss here. Are you in the financial industry or just a keen observer making input? Should he have let the banks continue window-dressing and carrying bogus share prices cos most investors were making 'awoof' profit? I'm sure this is the grouse most Nigerians have with the man,he made us lose money. But remember we were just sharing out our capital not enjoying Roi.

Actually, all we have, and some people have confused these allegations with court proven facts are only what Sanusi has been singing saying for the past one year, namely that the CEOs were criminals, the banks were about to fall, the shareholders wrongly invested their money, etc. The banks really have not replied to any of these allegations, because of the way, our laws empowered the CBN governor. Akingbola or Ibru have not been given any opportunity, as far as I know accept, refute, or modify any of Sanusi's claims. Unfortunately, the officers who could have made credible statements on behalf of these banks are their current Sanusi-appointed MDs, and their words have continued to be an echo of their master's claims.
Sanusi has visited the senate for so many times, I would have liked a situation where the senate committe on banking would have invited all our bank CEOs, Soludo, and one or two formers CBN governors before making Sanusi the hero that he's not.