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CBN Extends Credit Guarantee for Oceanic to December

By on August 2, 2011

Nigeria’s central bank extended an interbank credit guarantee for Oceanic Bank International Plc to Dec. 31 after it signed a deal to be acquired by Togolese lender Ecobank Transnational Inc.

The extension “should give the market the confidence to do business with the bank,” Joe Ajewale, director of banking supervision, told reporters in Abuja, the capital, today. The extension to Oceanic, which was bailed out by the Central Bank of Nigeria in 2009, should “encourage” the other rescued lenders to speed up their search for investors, he said.

Ecobank, which operates in more than 30 African countries including Nigeria, agreed to buy Oceanic, its managing director, John Aboh, said Aug. 1.

Oceanic is one of eight Nigerian lenders whose top executives were fired by the central bank after loans to equity speculators contributed to 700 billion naira ($4.6 billion) of non-performing debt, according to the Economic and Financial Crimes Commission. The regulator bailed out the lenders with 620 billion naira and has given them until Sept. 30 to recapitalize or risk having their assets sold.

Similar extensions were given to Intercontinental Bank Plc, Union Bank Nigeria Plc and Finbank Plc after the lenders signed transaction agreements with new investors, the Central Bank of Nigeria said.