NSE INDEX - 'Why Investors are Interested in Rescued Banks'

Tuesday 31 August 2010
- Culled from The PunchAs stakeholders await guidelines on the operations of the Asset Management Corporation of Nigeria, investors have continued to show interest in the rescued banks despite the poor balance sheets.An analyst, Mr. Femi Awoyemi, said the investors were interested for different reasons.According to him, “Some of the intending investors may just want to merge with the firms, while some are just interested in coming into the country.”The expert said that the Central Bank of Nigeria had the capacity and the framework that would involve people having access to the companies, to enable them to do a proper valuation.According to him, ”This will enable them to look through the portfolios and credit files to determine the extent of liabilities and the possibilities of recovering the sums.”He stressed the need to make judgment in terms of the assets, their brand worth, their infrastructure, their personnel and the level of information technology available based on what they wanted to do.He, however, stressed that the existing shareholders should have the first right of refusal if there was anything of such.Awoyemi said, “They themselves may want to acquire back their banks so their valuation becomes different. I don‘t think they have to pay for what they already own.”Reuters had quoted the Group Chief Executive, South Africa‘s Standard Bank, Mr. Jacko Maree, to have expressed interest in more than one of the rescued banks.According to him, ”Nigeria is a very important market for us and could one day be bigger than South Africa. For now, we are growing organically and if an opportunity presents itself, we will take it.”Maree did not give details as to which of the rescued banks Standard Bank might be interested in.He said that Standard Bank had a presence in Nigeria through Stanbic IBTC and that he would like another bank in Nigeria, where 150 million people and Africa‘s biggest energy industry made it one of the continent‘s hottest prospects.The Governor, CBN, Mr. Lamido Sanusi, had earlier said that shareholders would have the final say on the banks recapitalisation.