Recapitalisation: More banks to get inter-bank guarantee extension

By Ademola Alawiye and Ifeanyi Onuba
Wednesday, 3 Aug 2011

Indications have emerged that more rescued banks may get extension of the inter-bank guarantee from the Central Bank of Nigeria as the apex bank on Tuesday extended that of Oceanic Bank International Plc to December 31, 2011.

A reliable source in the CBN told our correspondent that the apex bank would still grant more rescued banks inter-bank guarantee extension.

The source, who craved anonymity because he was not permitted to speak on it officially, added that more implementation agreements would be unveiled soon, adding that some core investors were still running due diligence on some of the banks.

The source said, “The CBN will extend the same gesture that has been passed to the four rescued banks that have already signed Transaction Implementation Agreements to some of the remaining banks, which will soon announce their core investors.

“All the banks have bidders but the problem some of them have is getting favourable deals. A couple of banks are likely to reach agreements soon and they will get an extension of their inter-bank guarantee just like other rescued banks have been given.”

Meanwhile, the CBN on Tuesday said that the September 30 deadline given to the rescued banks to fully recapitalise or face liquidation would not be extended.

It also gave assurances that customers of any bank that failed to recapitalise by the period would not, in any way, lose their funds.

These were disclosed by the apex bank’s Director of Banking Supervision, Mr. Joe Ajewole, at the end of the Bankers’ Committee meeting held at the CBN headquarters in Abuja.

Ajewole said that following the TIA signed by Oceanic Bank with Ecobank Transnational Incorporated on July 30, the apex bank had decided to extend its (Oceanic Bank) inter-bank guarantee from September 30 to December 31, 2011.

So far, four of the eight rescued banks have signed TIA agreements, paving the way for strategic investors to inject additional funds into them.

They are Intercontinental Bank Plc (with Access Bank Plc); Union Bank (with African Capital Alliance); FinBank Plc (with First City Monument Bank Plc); and Oceanic Bank (with ETI).

The other four, Spring Bank Plc, Bank PHB Plc, Equitorial Trust Bank Limited and Afribank Plc, still face the threat of having their inter-bank guarantees withdrawn by September 30, if they fail to move beyond their current stages.

Ajewole said, “The recapitalisation of the intervened banks is still on course. Nobody, no depositor, no bank customer will lose a kobo. With Oceanic Bank signing TIA, the substantial portion of the deposit of the intervened banks have actually been resolved.

“Indeed, about 80 per cent of such has now been resolved and we are sure that by the deadline of September 30, 2011, all the intervened banks would have been recapitalised in one way or the other.”

http://www.punchng.com/Articl.aspx?theartic=Art201108033474548