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Foreign bank buys into 3 troubled banks

From right: Mr Sanusi Lamido Sanusi,Governor Central Bank of Nigeria,Mr Plutarchos Sakellaris,Vice President European Investment Bank and Mr Phillipe Pierre,Head Of European Union Delegation during the Visit of the European Investment Bank Vice President to the governor of Central Bank of Nigeria in Abuja. Photo by Gbemiga Olamikan

By Emma Ujah
ABUJA —THE European Investment Bank, EIB, is to buy into some of the nation’s troubled banks, Vice President of the Bank, Mr. Plutarchos Sakellaris has said.

Mr. Sakellaris who spoke after a meeting with the Governor of Central Bank of Nigeria, CBN, Mr. Sanusi Lamido Sanusi, in Abuja, Monday, said the specific commitments which would be announced in two days were expected to strengthen the banks’ liquidity through investments that could significantly increase their capital base and enable them play more supportive roles in the real sectors of the economy.

He said: “On Thursday we will unveil our package for three banks, it will be the type of package that you can imagine and this will be very supportive of their liquidity and enhance their real contribution to the economy. It will also enhance the strength of their capital base.

“I will not go further into any of the details but you will see on that occasion that this would be a concrete package of the EIB’s willingness to reinforce our involvement in the Nigerian financial system and this would be a support of confidence of the good work that the governor has begun in ensuring a strong financial sector.”

The EIB vice president who described Nigeria’s financial sector as “one of the best in Africa and the world”, especially following the banking reforms,” noted that the bank’s involvement “will be a concrete proof of EIB’s venture into the Nigerian financial sector and proof of our confidence.”

He said the reforms were “working to alleviate investors’ concerns over bad debt in banks”, adding that “it has also been crucial in helping restore confidence of both Nigerian and international investors.”

Mr. Sakellaris revealed that EIB provided about $1.5 billion of funding for 29 projects in Sub-Sahara Africa last year, with Nigeria receiving over $600 million which was invested in various sectors of the economy.

In his remarks, the CBN governor said the US EXIMBank has also restored the $1 billion credit line to Nigerian banks, which he said was a further demonstration of the confidence in the nation’s banking industry.

Sanusi restated his determination to make Nigerian banks play the roles of transmission channels to finance electricity, agriculture and infrastructure sectors, among others.

The CBN has been holding dialogues with boards and managements of the affected banks lately with a view to getting them to agree with its plans to allow other investors, from within and outside the country take up equities in the banks.


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