Managing Director of AMCON, Mr. Mustafa Chike-Obi
By Obinna Chima
The Asset Management Corporation of Nigeria (AMCON) will inject N821 billion to revive the five banks it rescued recently to take the banks’ net assets value to zero level, Managing Director of AMCON, Mr. Mustafa Chike-Obi, has said.
The banks are Oceanic Bank International Plc, FinBank Plc, Union Bank of Nigeria Plc, Equitorial Trust Bank Limited (ETB) and Intercontinental Bank Plc.
Speaking at an interactive session with newsmen in Lagos Monday, Chike-Obi said the monetary injection was, however, subject to the approval of the deals by the shareholders of the affected banks.
The banks are already planning to hold their respective Extraordinary General Meetings (EGMs) with their shareholders to extract the necessary approval to embrace the AMCON’s deal.
AMCON said the amount would take its total cash injection (inclusive of the N679 billion injected into the three banks it had wholly acquired earlier) into the rescued banks to N1.5 trillion.
Chike-Obi however explained that the total amount might increase to N2 trillion if shareholders of any (or all) of the rescued banks fail to vote in support of the respective deals.
Oceanic Bank, FinBank and Union Bank had fixed their respective court-ordered EGMs in respect of their proposed recapitalisation exercise for September 27, September 29, and September 30 respectively.
Intercontinental Bank had also received a court order to hold its EGM on September 26.
However, ETB had got approval from its shareholder to combine its business with Sterling Bank Plc.
The AMCON managing director also reiterated that the corporation would soon raise its bond issuance to N4.5 trillion so as to prepare for any unforeseen event that might occur as the banks get set to go in for their respective meetings with their shareholders.
He explained: “It is entirely possible that at the end of the EGMs, some of these people would vote ‘no’ and then the banks could be bridged. Even though we don’t know what is going to happen at the EGMs, we are preparing for any eventuality. I am raising my bonds to N4.5 trillion to prepare for any eventuality. We may not use the additional bonds that we are going for, but we need to be prepared.”
He also said that the costs of the entire banking reform over the next 10 years would be borne by AMCON and the 0.38 per cent of banks’ annual total assets value over the 10-year period.
Commenting on the three nationalised banks, he said: “We want to exit these banks as soon as it is practicable. Practicable means that we are not going to do anything that would lower the cost of our investments in these banks, either by dumping them too quickly or selling them at a time when the market is down. But we are interested in getting out of these banks as soon as possible.
“That also means that a transparent process to sell these banks would be established. We don’t want a process that would make people think that we are giving it to our friends or relatives. So that would mean hiring international advisers that would be very credible so as to set up a structure that is very transparent.”
He revealed that about 20 firms had expressed interest in the acquisition of Enterprise Bank Limited, Keystone Bank Limited and Mainstreet Bank Limited, adding that 15 of the firms are international institutions.
Responding to the question on the shape of the banking industry after the recapitalisation exercise, Chike-Obi said he envisaged a vibrant and aggressive banking system.
“We expect a banking system that is very aggressive in terms of competition, where banks would be going round looking for deposit and taking loans. I think that when these whole issues would be over, we are going to see a vibrant and virile banking institution. I also think we would see much more healthy institutions,” he said.