By Omoh Gabriel with Agency report
LAGOS—GOVERNOR of Central Bank, Lamido Sanusi, said, yesterday, that the bank had received bids for four of the nine banks it rescued in a N 620 billion bailout last year.

Lamido who spoke in an interview with CNBC Africa Television also said that he would be satisfied with 9.0_9.5 per cent inflation rate in the country and that creating economic growth was the priority of CBN.

He said in the television interview: “When you have a country of 150 million people with 70 percent below the poverty line, it is extremely important to provide a stable environment to ensure that growth of the economy is not hampered by some desire to pursue a very low single_digit rate of inflation.

Lamido Sanusi

“We have brought inflation down in the last one year, from 16 per cent to 10 per cent. We think we can do single digits and that is good enough, nine or 9.5 per cent, would do for me.”

Sanusi who said that two foreign institutions were involved in the bidding process for the rescued banks, as well as several local banks and private equity firms in partnership with foreign banks, added: “The advisers have finished analysing bids already received for four of the banks. We expect the bids for the others to have been completed by the end of this month.”

He, however, gave no further details as to who the bidders were.

The nine rescued banks are Afribank, Bank PHB, Equitorial Trust Bank, Finbank, Intercontinental Bank, Oceanic Bank, Spring Bank and Union Bank. Wema Bank and Unity Bank were also judged to have insufficient capital but did not receive an emergency cash injection because it had a healthy liquidity position.

Foreign banks

The foreign banks that had openly expressed interest in investment opportunities in Nigeria include South Africa’s First Rand, Standard Bank and Nedbank. Nigerian banks considering a bid for a rescued peer include First Bank, Fidelity Bank, Skye Bank and Diamond Bank.

Chief Executive of Fidelity Bank, Mr. Reginald Ihejiahi, told CNBC Africa television recently: “We need more distribution, we need more contact points with our customers. The institutions we are interested in are institutions that have the retail network.”

Vanguard gathered that CBN and Ministry of Finance were in the process of finalising the setting up of an asset management company, AMCON, which would purchase non-performing loans with collateral and chase the recovery of the bad loans in the rescued banks. AMCON would also inject funds and take equity stakes if there were unsecured loans which needed absorbing.

Sanusi said much work had been done in the last month to value the bad loans and gauge how much of them were unsecured..

He said a recommendation had been made to the President on the constitution of AMCON’s board and was confident that once that was approved, deals to buy non-performing loans from the rescued banks could quickly be announced.

Sanusi said: “I don’t see any reasons why AMCON can’t take these decisions in the next few weeks,” noting that the recovery of bad assets would take much longer.
He added: “As far as the details are concerned, it will take a year to go and audit every asset, to do every valuation, do legal due diligence, set up systems and processes.”

Interest rates have been on hold at 6.0 per cent for more than a year and inflation is in double digits.