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Investors show renewed interest in Nationalised Banks

By on August 16, 2011
Three investors have joined the league of firms seeking to buy the three nationalised banks – Mainstreet Bank, Keystone Bank and Enterprise Bank – including one that had earlier bidded for the defunct Springbank Plc – now known as Enterprise Bank.
Among those that were shortlisted by Springbank before the takeover by the Nigeria Deposit Insurance Corporation (NDIC) were Cloudleap Partners LCC; GEM Capital CARAM Capital. The Central Bank of Nigeria (CBN) had penultimate Friday set up “bridge banks” to acquire the assets and liabilities of the defunct Springbank, BankPHB and Afribank, which were then sold to AMCON.
The banks that replaced them are MainStreet Bank Limited (Afribank Plc), Keystone Bank Limited ( Bank PHB) and Enterprise Bank Limited (Springbank).
Thereafter, AMCON injected N679 billion into the new banks via bonds. MainStreet Bank received N285 billion; Keystone Bank secure N283 billion while Enterprise Bank was given N111 billion. These banks have since liquidated the N170billion bailout funds, which was part of the N620billion injected into 10 banks by the CBN following the banking sector crises in 2009.
The AMCON boss said contrary to the insinuations that foreign investors are shying away from the country, there have been renewed interest in the nationalised banks.
Chike-Obi said the applications of the investors (both local and foreign) are being assessed by the agency and decisions would be taken based on the merits of their fillings. “We have got 15 proposals from both local and foreign banks that want to buy the three banks. We are looking at the presentations and will consider them based on their merits,” he said.
He said the CBN is at the centre of such considerations and will take decisions based on the ability of such institutions to run the banks effectively and profitably.
The AMCON boss said contributions to the banks were equity capitals, meaning that AMCON is expecting returns in the form of dividends and appreciation of capital. “What we contributed was equity capital. We are owners of the bank,” he said.
According to him, the N679 billion bond given to the three banks to bring them to right capital adequacy levels is a three-year tenured zero couponed instrument with 10.5 per cent yield per annum. He said the bonds can be exchanged for cash immediately they were received from AMCON.

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