Nigeria’s Rescued Banks Retreat on Nationalization Concern
Nigerian lenders bailed out two years
ago following a debt crisis fell after the central bank
threatened to nationalize them if they failed to meet a Sept. 30
recapitalization deadline.
Oceanic Bank International Plc (OCEANIC) lost 4.9 percent, the most
since June 23, to 1.37 naira by the 2:30 p.m. close in Lagos.
Intercontinental Bank Plc (INTERCON) retreated for a third day, losing 1
percent to 97 kobo. Afribank Plc lost 4.2 percent to 1.13 naira,
the lowest in two weeks, while Finbank Plc (FIRSTINL) lost 1.8 percent to
close at 55 kobo.
The Asset Management Corp. of Nigeria, or Amcon, created by
the central bank to buy the bad debts of lenders, may become a
majority shareholder in rescued banks by filling their equity
shortfalls, Kingsley Moghalu, a Deputy Governor of the Central
Bank of Nigeria, said on July 1. While nationalization is not
the “favored option,” it is preferable to liquidation, and if
Amcon takes a majority stake in a lender, it may manage the
bank for a year or two before selling it, he said.
“Such comments are negative to the market,” Eugene
Ezenwa, chief operating officer of Sterling Stockbrokers Ltd., a
Lagos-based brokerage, said by phone today. “Ordinarily, in a
situation where government will be running banks, they will be
making losses.”
The central bank bailed out eight of the country’s 24
lenders in 2009, pumping 620 billion naira ($4 billion) into the
industry to prevent its collapse. The other lenders bailed out
are Union Bank of Nigeria Plc, Bank PHB Plc (PLATINUM), Spring Bank Plc (SPRINGBK) and
Equitorial Trust Bank, a privately held lender.
To contact the reporter on this story:
Vincent
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