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Investors panic over nationalised banks report

By on February 24, 2013

Tension is rising among interested investors in the three nationalised banks as financial advisers appointed to value the banks have failed to submit their reports.

The consultants, appointed in August last year to act as advisers in the sale of the nationalised banks, were meant to submit their reports on February 20, 2013.

Our correspondent, however, gathered that the advisers were unable to present any reports on the three banksMainstreet Bank Limited, Keystone Bank Limited and Enterprise Bank Limited – to AMCON as at February 20.

There had been intense pressure and lobby by investors, it was learnt.

The Managing Director, Asset Management Corporation of Nigeria, Mr. Mustapha Chike-Obi, said that the agency had received expression of interest from 20 local and foreign banks willing to invest in the three nationalised banks.

A reliable source, who preferred not to be mentioned, told our correspondent, “The reports, which were supposed to be released on Wednesday, were not released; and there was no cogent reason for that.”

While some stakeholders have raised issues of foul play, the Head of Communications, AMCON, Mr. Kayode Lambo, allayed fears of mismanagement.

Lambo, in an interview with our correspondent, said, “The financial advisers were given the mandate to submit the reports on February 20, but right now we’ve not received any. Maybe it’s because the managing director and executive director of AMCON are not in the country. They have travelled for a road show in London so they may submit the reports on Monday.”

Citibank Consortium was appointed as financial adviser to Mainstreet Bank, RenCap was appointed to undertake the advisory work on Enterprise Bank and Keystone Bank.

As part of their terms of reference, the financial advisory firms are expected to evaluate the three banks and advise the corporation on how best to dispose of the commercial banks.

Chike-Obi had said that one of the options available to the corporation was to list the financial institutions on the Nigerian Stock Exchange.

“We must make sure that whoever takes over these banks, ultimately, is fit and proper to run a bank; we must know where their money is coming from and we must know that the management is going to be sound,” he had said.

The Federal Government had through its regulatory agencies nationalised the former Afribank Plc, Bank PHB and Spring Bank Plc to save stakeholders’ interest. It was obvious that the banks could not meet the recapitalisation deadline.

Apart from not having credible core investors to conclude the recapitalisation or merger with, the defunct banks were reportedly recoding losses on a monthly basis, as customers were moving their deposits to healthy banks.

AMCON thereafter appointed boards and management teams for the nationalised banks with the mandate to manage the banks along best commercial practice to compete effectively in the banking sector and provide quality service to customers.