By Omoh Gabriel, Business Editor
LAGOS—Indications emerged yesterday that some of the foreign investors approached by the CBN to take equity stake in the five banks it sacked their Managing Directors and boards three weeks ago may be considering a backout, hinging their decision on the controversy generated by the take-over.

Vanguard reliably gathered that while two of the foreign investors have turned down the offer outrightly, three are asking for more time to study the situation.

It was also learnt that those who withdrew their expression of interest were foreign investors pencilled down for Intercontinental and Afribank.

A pre-selection exercise in July by the apex bank had short-listed group of foreign investors representing Nigerian businessmen and politicians with a view of using them to enter the banking industry.

At the last London Road Show put together by the apex bank, it had invited the investors to the meeting and subsequently held private sessions with them individually, regarding acquisitions of the affected banks.

Two of the investors it was gathered last night which had lined up for Intercontinental Bank and Afribank eventually declined on the strength of the advice of their Missions here in Nigeria, and the counsel of their Foreign Ministries which qualified the unfolding actions of the CBN Governor as “controversial.”

The other three earmarked for Oceanic, FinBank and Union Bank requested for more time to make more consultations since their home countries were equally sceptical.

But the CBN Governor, Mallam Sanusi Lamido Sanusi has denied that the CBN went to London in search of foreign investors. According to him, the CBN has no immediate plan to sell the affected banks to either local or foreign investors.

However, Sanusi said in London 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 had alleged 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 the CBN team was meeting with each of those pre-selected foreign investors, 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 said 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.
Addressing international banks, lenders and rating agencies in London, Sanusi said that the Nigerian economy was likely to expand five 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 six per cent without electricity, without peace in the Niger Delta,” Sanusi said, referring to unrest in the country’s oil heartland, adding. “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 N420 billion into five banks and sacked their senior management, saying lax governance had left them so weakly capitalised that they posed a systemic
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.


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