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Eurasia Group Business News

Nigeria to Limit Domestic Banks’ Market Share to 20%

Nov 5

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Lamido Sanusi, Governor of the Central Bank of Nigeria, has taken a tough line with the banks

Lamido Sanusi, Governor of the Central Bank of Nigeria, has taken a tough line with the banks

The Central Bank of Nigeria (CBN) will limit domestic banks’ market share to 20% and prevent the country’s biggest lenders from acquiring stakes in 10 institutions that failed an audit earlier this year, the CBN’s Governor Lamido Sanusi said.

The Central Bank of Nigeria would also prefer that any foreign bank planning to acquire a stake in a Nigerian bank be willing to share ownership with Nigerians and not demand 100% of the entity, Lamido Sanusi said in an interview published recently.

The Central Bank of Nigeria conducted audits of Nigeria’s 24 banks this year that were aimed at stabilizing an industry reeling from bad debts. Sanusi fired the chief executive officers of eight lenders and injected at least N620 billion ($4.12 billion) into those and two other banks to boost their capital and liquidity.

A first audit in August resulted in the sacking of the CEOs of the following banks: Afribank Nigeria Plc, Finbank Plc, Intercontinental Bank Plc, Oceanic Bank International Plc, and Union Bank Nigeria Plc.

In October, the CEOs of Bank PHB Plc, Spring Bank Plc and Equitorial Trust Bank Ltd. were dismissed, while Wema Bank Plc and Unity Bank Plc retained their management and received capital injection. Read the rest of this entry »

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Central Bank of Nigeria (CBN) Audit Will Affect Two Banks

Oct 2

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Central Bank of NigeriaTwo Nigerian banks listed on the Nigerian Stock Exchange (NSE) will be affected by the Central Bank of Nigeria’s latest audit of lenders, said Ndi Okereke-Onyiuke, the Director-General of the Nigerian Stock Exchange.

Okereke-Onyiuke, who addressed brokers on the floor of the Nigerian Stock Exchange in Lagos, the commercial capital, did not name the banks. The audit report by the Abuja-based central bank will be announced later today or tomorrow, she said, without specifying how the lenders would be affected.

“Only two of our quoted banks will be involved, but there will not be too much controversy,” she said.

On Aug. 14, the Central Bank of Nigeria (CBN) fired the chief executive officers of Afribank Plc, Intercontinental Bank Plc, Oceanic Bank Plc, Finbank Plc and Union Bank Plc and injected NGN420 billion (USD2.8 billion) into the banks to keep them afloat after an audit of 10 lenders showed the five banks faced collapse because of mounting bad debts.

ThisDay, a Lagos-based newspaper, reported today that the Central Bank of Nigeria may dismiss the CEOs of at least two more banks amid a liquidity crisis in the banking industry. The heads of Bank PHB Plc and Spring Bank Plc may be sacked, the newspaper said, without saying where it got the information. Read the rest of this entry »

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United Bank for Africa (UBA) of Nigeria to Sell NGN500 Billion (USD3.25 Billion) of Bonds

Sep 1

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United Bank for AfricaUnited Bank for Africa Plc (UBA), Nigeria’s fourth-biggest lender by market value, said it plans to sell NGN500 billion (USD3.25 billion) of bonds.

The bonds will have a seven-year tenure and will be issued in portions, the Lagos-based bank said in a statement distributed today at the Nigerian Stock Exchange in Lagos, Nigeria’s commercial capital. Shareholders will vote on the proposed sale at a meeting on Oct. 2 and the issue is subject to regulatory approval, UBA said, without providing further details. Read the rest of this entry »

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Ratings of Intercontinental Bank, Union Bank, and Oceanic Bank Suspended at Renaissance Capital (RenCap)

Aug 18

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Renaissance Capital PartnersIntercontinental Bank Plc, Oceanic Bank Plc, and Union Bank of Nigeria Plc had their ratings suspended at Renaissance Capital (RenCap), after the Central Bank of Nigeria (CBN) fired their CEOs and the CBN halted trading of their shares.

Nigeria’s central bank Governor Lamido Sanusi on Aug. 14 dismissed the CEOs of these three banks, along with those of Afribank Nigeria Plc and Finbank Plc, after an audit found the lenders were in a “grave situation” and their management had acted in a manner “detrimental to the interests of depositors and creditors.” The Nigerian Stock Exchange (NSE) suspended trading in the five banks’ shares yesterday. Read the rest of this entry »

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Access Bank of Nigeria Margin Loans at 8.5% of Total

Jul 14

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Access BankAccess Bank Plc, a Nigerian lender, said margin loans on its books totaled NGN 33.4 billion(USD 225.9 million) at the end of March.

The amount, which represents 8.5% of the bank’s total loans, was given to financial institutions, corporations, and individuals “for the sole purpose of acquiring shares,” Lagos-based Access said in its annual report today.

About NGN 2.57 billion was non-performing at the company’s financial year-end. “Adequate provisions have, however, been made for the non- performing margin loans,” Access Bank said.

Eurasia Group, a New York-based research company, said in May that banks in Nigeria may have as much as USD 10 billion of toxic assets. The bad debt is partly the result of, at least, NGN 1 trillion naira (USD 6.8 billion) of so-called margin loans used by speculators to buy shares as equities soared almost 13-fold since 2000, according to Bank of America Corp. Read the rest of this entry »

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