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| FG may acquire shares in 9 rescued banks |
| Written by Mohammed S. Shehu, with agency report |
| Friday, 16 October 2009 23:20 |
 Federal Government may acquire shares in some of the nine troubled banks recently rescued with a N600 billion bailout in the last two months if the institutions fail to recapitalise or find buyers, but are deemed systemically important, the government said yesterdays.
The Finance Ministry said while trying to build confidence in the banking sector, it would aim for successful bank restructuring which would entail preserving the payment system, ensuring there are functional banks and making sure troubled assets are managed and disposed off appropriately. “In the event that some of the affected banks are unable to recapitalise and successfully go through a merger and acquisition, the government may acquire shares in such banks, if they are deemed systemically important,” the ministry said in a statement made available to international news agency Reuters. “Thereafter, government equity will be sold at the earliest possible opportunity.” Central Bank Governor Lamido Sanusi told Reuters in August his preferred option for the first five banks rescued would be for them to be purchased by other financial institutions. The Central Bank has injected nearly N600 billion in the nine banks and sacked their senior management for recklessly granting loans and lax governance that left them so undercapitalised they posed a systemic risk. The bank executives are that of the Union Bank of Nigeria, Intercontinental Bank Plc, FinBank Plc, AfriBank Plc and Oceanic Bank International, Bank PHB Plc, Equatorial Trust Bank Plc and Spring Bank. The Finance Ministry and the Central Bank have repeatedly said no Nigerian bank would be allowed to fail. |