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Recapitalisation: Nigerian banks to vote Sept 30, says AMCON

Nigeria’s state asset management company (AMCON) said yesterday that it expects five of the nine banks that were bailed out for $4 billion to call extraordinary general meetings by September 30, so that shareholders can vote on recapitalisation deals signed with investors.   

AMCON Chief Executive, Mustapha Chike-Obi, told Reuters he expected shareholders to accept the deals. If they did not, regulators would need to explore all options to protect depositors, employees and the financial markets.

Three of the other banks rescued in 2009 were nationalised this month after they failed to show an ability to recapitalise. The other rescued lender, Unity Bank, has already recapitalised. Intercontinental Bank, Oceanic Bank, Finbank, Union Bank and Equitorial Trust Bank have signed agreements with investors, but shareholders have yet to accept the deals.

Chike-Obi said: “If they go to EGMs and decide to reject the deal, then it will be clear those banks will not be able to recapitalise themselves and regulators will need to step in. But I don’t expect them to do that. If it is clear a bank cannot recapitalise on its own, then all options will have to be explored by regulators. We will not allow depositors, employees or the financial system to suffer.”

AMCON took over Spring Bank, Afribank and Bank PHB — all part of the 2009 bailout — after they were nationalised because they did not show an ability to recapitalise, a move the Central Bank of Nigeria, CBN, said would draw a line under the country’s banking crisis.

The former banks’ assets have been transferred to three newly created, nationalised lenders: Mainstreet Bank, Keystone Bank and Enterprise Bank.


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