Nigeria - Central Bank (CBN) is considering three options to recapitalise the country’s five troubled banks

The banks are: Intercontinetal Bank; Oceanic Bank; Union Bank; Finbank and Afribank.
The Central Bank is considering three local options aimed at acquisitions of the five troubled banks following the seeming collapse of its offshore investment mission.

The three options which the apex bank is considering are:

Option 1: Rights Issue

In which the apex bank hopes to execute a rights issue, converting the tier two capital (the amount injected) to 80 per cent stake in the affected banks’ shareholding, leaving the other shareholders with 20 per cent.

Option 2: Scheme of Arrangement

The CBN management is said to be considering the alternative of getting the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange NSE, to do a “Scheme of Arrangement”. The thinking in the CBN is that this option is the most viable now and if applied, it will involve a legal means of bringing shareholders of these banks to an extra-ordinary General Meeting to agree to a merger or acquisition arrangement.

Option 3: Acquisition

If the first two options fail, the apex bank would then go for the third option which is acquisition.

This involves nominating a bank in the country to acquire any of the five banks and then backing the action with statutory powers.

Breaking News: CBN Appoints new CEO’s for 5 banks, reveals N2.4trn debt

Source: Proshare Limited

The CBN, this morning, at the Emergency Bankers’ Committee convened by the CBN in Lagos confirmed the rumour that has been making the rounds all week that the CEO and Executive Directors of the following five banks have been removed:

1. Erastus Akingbola (Intercontinental Bank);
2. Okey Nwosu (Finbank);
3. Sebastian Adigwe (Afribank Plc);
4. Mrs Cecelia Ibru (Oceanic Bank Plc); and
5. Bartholomew Ebong (Union Bank Plc).

The CBN Governor, Lamido Sanusi explains that the result of the special examination done by the joint team from CBN and NDIC reveals excessive credit lending in the following banks – Oceanic Bank Plc, Intercontinental Bank Plc, Afribank Plc, FinBank plc, and Union Bank of Nigeria Plc.

The CBN Governor says that the CBN today injected N400bn tier 2 capital into the 5 banks. This is to be repaid soon from their offer proceeds.

The CBN Governor ANNOUNCES the following appointments:

1. Mr. John Aboh to take over as CEO of OCEANIC BANK Plc
2. Mr. Lai Alabi to take over as CEO at INTERCONTINENTAL BANK Plc
3. Mr. Arah NEBOLISA to take over as CEO at AFRIBANK Plc
4. Susan Iroche to take over as CEO at FINBANK Plc
5. Mrs. Funke Osibodu to take over as CEO at UNION BANK Plc

Lamido says there will be no setting up of an asset Management Company or bad loan bank until full declaration of exposures by all banks.