BARRING any unforeseen circumstance, four of the eight sick banks in the country will be handed over to new investors this month.

This follows intense lobbying that had been going on between the Central Bank of Nigeria (CBN) - appointed managements of the affected banks and some minority shareholders’ groups. Some of the banks are those that held investors’ forums recently.

Nigerian Tribune gathered that apart from meeting the shareholders under their group affiliations, the bank executives are reaching out to individual leaders of the groups, who are believed to be averse to the sale of the banks, particularly those that went to court.

It will also be recalled that the CBN had organised two consultative meetings with them, where the CBN governor, Mallam Lamido Sanusi, stated unequivocally that the shareholders would be carried along in the recapitalisation process, adding that it was not the business of the apex bank to sell the banks.

He, however, warned that if efforts to recapitaise the banks were continuously frustrated, he would be left with no other option but to hand over the banks to the Nigeria Deposit Insurance Corporation (NDIC) for outright liquidation.

Also, the CBN governor confirmed recently that two foreign financial institutions and some local banks had indicated interest in four of the eight banks, stating that the process would be completed last month.

A leader of  a shareholders’ group  who was approached told the Nigerian Tribune that he told the bank chief that the stand of the bank owners was that, it was not the responsibility of the apex bank to sell any of the banks, stressing that due process must be followed to recapitalise the banks.

Speaking with the Nigerian Tribune, the chairman, Progressive Shareholders Association of Nigeria (PSAN), Mr Boniface Okezie, who said though he was never contacted, maintained that his stand on the recapitalisation was well known.

According to Okezie, neither the CBN appointed management nor the apex bank has the right to sell the banks, stressing that there was no need to embark on a futile exercise.

He stated that the first thing the CBN should do is to remove forthwith its appointees in those banks, paving the way to the remaining board members who survived the CBN’s  last year sack to look for investors for the banks.

He noted that the present managers of the banks were doing  the CBN’s bidding, stressing that with them there, there cannot be transparency exercise.

“These CBN-appointed people cannot be there for recapitalisation. They don’t have any business in those banks. They are doing CBN’s bidding. We are calling on CBN to withdraw them forthwith. If the people are good, let the board give them appointment letters,” he stated.

Okezie made a case for a time frame of not less than 18 months for the banks to recapitalise, adding that it was the easiest way to recapitalise the banks.

Another shareholder, Nona Awoh, said the banks should make sure that the interests of minority shareholders were taken into consideration.

According to him, beyond taking equity positions, the incoming investors must be made to make long-term commitments to the banks.

FinBank, Intercontinental Bank, Bank PHB and Oceanic Bank had held various meetings with their minority shareholders.

At an investors’ forum recently, Group Managing Director and Chief Executive of FinBank, Suzanne Iroche, said there was need to recapitalise the bank as quickly as possible.

“If CBN takes away the forbearances without adequate capital and liquidity immediately, we are failed institutions and we can’t afford that,” she said. “An institution that operates negative capital is an institution which loses value over time.”

She added that the bank cannot continue to operate with negative capital as 88 per cent of its loans are currently not performing.

“We have taken deposits and shareholders fund up to N88 billion which is yielding nothing for us but that is costing us money. We have to resolve this as quickly as possible,” she said.

Meanwhile, commercial banks’ opening balance with the CBN has continued to maintain a drop, raising concerns over liquidity in the system.

The funds stood at about N420 billion on Friday, down from N535 billion on Thursday of the previous week, representing a 21 per cent drop. The drop, according to dealers, was largely due to foreign exchange and treasury bill purchases during the week.

“The market remains sufficiently liquid to support rates at the present level until the next cycle of disbursal of budgetary allocations,” one dealer said.

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