Three banks to acquire rescued banks

Ecobank Transnational Incorporated (ETI), Fidelity Bank Plc and United Bank for Africa (UBA) Plc are amongst keen investors said to have constituted high-level acquisition committees in readiness to buy some of the troubled banks in Nigeria.

Indications to this effect which emerged at the weekend showed that these prospective investors are eager to confirm the financial strengths of their prospects despite mounting oppositions against the move.
According to competent industry sources, the committees were formed at the instance of the acquiring banks and the members had already commenced conducting due diligence on the affected banks.
ETI is the parent company of Ecobank and has a strategic business co-operation relationship with Nedbank of South Africa.
The source told Business Hallmark that these three banks have shown enough commitment to buy some of the troubled banks hence their endorsement by the CBN to verify the potentials of their prospects.
However, the German-based bank, Deutsche, which was earlier speculated to show interest in acquiring one of the sick banks was said to have shied away after accepting financial advisory job from the CBN to one of the sick banks.
Meanwhile, the advisers and consultants engaged by the apex bank to look at the financial books of the rescued banks are said to have submitted their findings.
Equally, the foreign banks who invaded the nation's banking industry last week for toxic assets of both healthy and unhealthy banks are said to have nearly concluded their assignments.
Their task was necessary to truly know how much of banks' Non-Performing Loans (NPLs) expected to be lifted out of the books of banks by the Asset Management Corporation of Nigeria (AMCON).
But the acquisition committee by the prospective investors are essentially an independent initiative designed to reconfirm the reports of CBN-appointed advisers and consultants. Business Hallmark's text messages to the spokesmen of Fidelity Bank Plc and UBA Plc, Mr Emma Ezinna and Mr Martins Anyanwu respectively to extract comments were not replied at press time.
INTEREST OF FOREIGN BANKS
There appears to be a renewed interest of the foreign banks in the nation's banking industry. As at last week, the Governor of CBN, Mallam Lamido Sanusi, was quoted as saying commitments from four foreign investors for the troubled banks had been received. Investigations revealed that most of those foreign investors are mainly from South Africa. They include Standard bank, ABSA group, First Rand and NEDBANK while HSBC is from the United Kingdom (UR). At present, there seems to be uneasy calm in the board rooms of these sick banks as the shareholder groups are said to be itching for a showdown against the apex bank.
Our sources said that the litigations against sale of these banks would eventually dissuade prospective investors who are expected to be cautious in sealing such deal.
“The subsisting legal issues on these banks would definitely scuttle efforts by the CBN to sell those banks to any investor, a concerned banker told Business Hallmark at the weekend.
He continued, “the banks belong to shareholders and unless their consent is got, there is no magic to accomplishing that tall dream.''
As Sanusi once said, “my own preference is that I would prefer a strong Nigerian institution that would acquire these banks.” At another forum, he reportedly said, “I would prefer a bank that is willing to share ownership with Nigerians, not a bank that wants 100 per cent. I would prefer those that have already shown interest and commitment prior to now, to one that is just trying to come in now.” He continued, “we cannot have a bank at 25 or 30 per cent of market share… we also need a healthy mix of local and foreign banks.”
Whatever that happens; industry stakeholders are of the view that those sick banks won't be easy sale.

SHAREHOLDERS FLAY CBN'S MOVE
Representatives of various shareholders' associations have condemned the plan by the Central Bank of Nigeria (CBN) to sell off the rescued banks.
The shareholders argued that the CBN cannot sell what it does not own, insisting that the banks should be allowed to recapitalise on their own.
CBN Governor Mallam Sanusi Lamido Sanusi, was last week quoted as to have said in Basel, Switzerland that three international banks and some local investors would soon takeover some of the troubled banks. He said that the prospective buyers would submit their offers to the Federal Government, adding that the picture on the sale of the banks would become clearer by mid-August this year.
He said the interested parties were undertaking “detailed” due diligence on the affected banks. 
The Group Managing Director/Chief Executive Officer, Afribank Plc, Mr. Nebolisa Arah, had earlier disclosed the move when he said that Afribank in collaboration with the financial advisers appointed by the CBN were embarking on due diligence as part of its preparation for recapitalisation.
Arah had said, “We need to recapitalise the bank for growth so that we can engage in big businesses. What we are trying to do is to restore value to all stakeholders. The whole idea is to ensure much value for shareholders for the investment they have made in this bank.”
But the National Co-ordinator, Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okezie, argued that there was no need to sell the banks since the CBN has said that they have returned to profitability.
Okezie said, “It clearly shows that the guy (Sanusi) still has an agenda. When you have told us that these banks are making profit, why talk about selling them again. He appointed managers instead of strengthening the prudential guideline and allowing the banks to recapitalise. President Barak Obama of the United States of America did not have to appoint new management when he bailed out banks in America. Instead, he beefed up banks and cautioned them to do thing.
“Today, those banks that the CBN rescued have become 'old peoples home' as old people who have gone into retirement were called back to come and run banks they don't know anything about. The CBN should have left these banks to shop for investor to recapitalise on their own. Have you ever seen where a regulator would be going about the world looking for investors to come and buy his bank? President Goodluck Jonathan needs to call the CBN to other.”
On his part, the President, Renaissance shareholders Association, Mr. Olufemi Timothy, opined that the CBN Governor may have been misquoted as one cannot sell what he does not have.