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Rescued banks silent on subsidiaries' fate
Sunday, 23 January 2011 16:05
Some of the rescued banks are silent on how far they have gone with their recapitalisation effort and the fate of their subsidiaries,
especially those outside the country. Oceanic Bank, one of the banks closed down its outlet in The Gambia last week, citing inability to meet the capital requirements of 150 million dalasi (about US$ 5.6 million) demanded by that country's authorities. Thomas Quayson, the bank's spokesperson in the country, said that the bank
headquarters in Nigeria could no longer subsidise its foreign branches, and as a result are returning deposited money to customers.At the bank headquarters in Nigeria, staff refused to talk about the issue. "All we can say now is that we have opted to go from international banking to national" a source said. "Details of what will happen to our subsidiaries cannot be given now until the whole process is over, right now, it is still a work in progress" he added.
Following the sale of some non-performing loan portfolio to the Asset Management Corporation of Nigeria (AMCON) and receipt of bonds worth over N200 billion in exchange, John Aboh, the bank chief executive, said it is now operating with an enhanced liquidity ratio that is above the 25 per cent level required by the Central Bank of Nigeria (CBN).
Like Oceanic Bank, officials at Intercontinental Bank too were reluctant to talk about the progress of their subsidiaries. "When we conclude our own recapitalisation locally, we would now issue a press statement stating emphatically on what was bought or acquired and by whom. Until that is done, we really don't want to talk on this" a source who did not want to be quoted officially said.
Intercontinental Bank's chief, Mahmoud Lai Alabi has however said that regardless of the outcome of the on-going recapitalization process, the bank will remain an international bank. The bank has branches in the United Kingdom and Ghana presently.
Tunde Olofintila, Wema Bank's spokesperson said the bank has no worries as it has no subsidiary issues to address so it is focussing on restructuring for regional banking.
Unity Bank also disclosed on its website that its banking operations are limited to five zones of Lagos and South West, North West, Central, North East, South.
Despite receiving over N200 billion in consideration bonds from AMCON last year, Nigeria's sixth largest lender by total assets, Oceanic Bank, is not out of the woods just yet.
Adesoji Solanke, banking analyst, Renaissance Group, an investment bank, says, "While we understand that Oceanic Bank is still carrying out its valuations and holding discussions, we believe significant progress is being made. This is on the back of the bank's decision to dispose of its Gambia operations which we believe is a decision that would have to be taken in cognizance of the strategic direction of the acquirer"
Written by Oluwaseyi Bangudu
Source: Next
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