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A number of foreign banks, including four South African institutions and a British firm, have expressed interest in buying into the country’s troubled banks. Governor of Central Bank of Nigeria (CBN), Malam Sanusi Lamido Sanusi, told the Wall Street Journal in an interview on Thursday, adding that he expected a number of healthier banks in the country to express stakes, probably with foreign partners.“There have been a number of foreign banks that have made it very clear that they are interested,” he said.
He declined to name banks, except to say that four South African banks and a British bank had expressed interest. Rumours have swirled that Barclays Plc was interested, but Mr. Sanusi declined to confirm that interest.
He did not rule out a foreign bid for 100 per cent of one of the troubled banks, but he said a bid for a lesser stake would be viewed more favorably by the government.
“Obviously, if you had a foreign bank that brought in capital, brought in skills, brought in management and was also willing to cede ownership or a substantial minority stake to Nigerians, that’s preferable to ones that want 100 per cent,” he said.
He also said that the central bank would favour companies that had been in Nigeria before its recent troubles. “In the event of having two competing bids, we’d probably like to support the bid of someone who’s already shown for a long time wanting to come into the economy and who’d come in earlier,” Mr. Sanusi said.
In August, Mr. Sanusi orchestrated a $2.6 billion bailout of five Nigerian banks, which the central bank said, were teetering because of mismanagement and under-performing loans. Four additional banks were bailed out this month, with an additional cash injection of $1.3 billion.
He said, however, that the central bank was not inclined to have any bank to attain more than a 20 per cent market share in the Nigeria’s domestic banking sector. He said the central bank would likely step in to prevent a deal that would create a combined bank with a greater market share.
“I would probably stop it,” he said.
Sanusi moved quickly to rescue the Nigeria’s bloated banks when he took the reins in June. Amid an oil-fired investment and spending boom, banks lent money easily, and also invested heavily in the local stock market, which has since tanked.
That lending has come back to bite the banks, many of which are suffering from unpaid loans. Mr. Sanusi, however, has been shopping for the sick banks domestic and foreign investors.