{"id":463621,"date":"2011-07-18T23:07:54","date_gmt":"2011-07-18T23:07:54","guid":{"rendered":"http:\/\/www.ghanamma.net\/2011\/07\/18\/no-going-back-on-september-recapitalisation-deadline-for-sick-banks-cbn-%e2%80%a2endorses-intercontinental-bank%e2%80%99s-2-others%e2%80%99-recapitalisation\/"},"modified":"2011-07-18T23:07:54","modified_gmt":"2011-07-18T23:07:54","slug":"no-going-back-on-september-recapitalisation-deadline-for-sick-banks-cbn-%e2%80%a2endorses-intercontinental-banks-2-others-recapitalisation","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2011\/07\/18\/no-going-back-on-september-recapitalisation-deadline-for-sick-banks-cbn-%e2%80%a2endorses-intercontinental-banks-2-others-recapitalisation\/","title":{"rendered":"No going back on September recapitalisation deadline for sick banks – CBN \u2022Endorses Intercontinental Bank\u2019s, 2 others\u2019 recapitalisation"},"content":{"rendered":"
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|\u00a0Print\u00a0|<\/a>\u00a0E-mail<\/a><\/p>\n

Written by Odidison Omankhanlen<\/span> Tuesday, 19 July 2011<\/span><\/p>\n<\/div>\n

THE Central Bank of Nigeria (CBN) has reiterated that the September 30 deadline given to the eight rescued banks to recapitalise is sacrosanct, stressing that it will stop the interbank guarantee to the affected banks at the expiration.<\/p>\n

Addressing newsmen on the progress of the recapitalisation process and the way forward in Lagos on Monday, CBN\u2019s Deputy Governor, Financial System Stability\u00a0 (FSS), Dr Kingsley Moghalu, said there would be no extension of the deadline as enough time was given the affected banks by the apex banks to seek new investors.<\/p>\n

On what will happen to any of the banks that is unable to meet\u00a0 the deadline, Moghalu said the apex bank would take what it considered appropriate action after a\u00a0 serious consideration. He, however, declined to speak on the nationalisation option.<\/p>\n

\u201cThe September deadline is firm. No going back on it. We expect all the affected banks to meet up. As a systemic regulator, our responsibility is to restore financial stability and normalcy to the system. We will take action that we deem fit,\u201d he stated.<\/p>\n

The apex bank\u2019s top shot noted that landmark achievements had been made in the recapitalisation process as three of the rescued banks, FinBank, Intercontinental\u00a0 Bank and Union Bank had made significant progress, stressing that the CBN had therefore, deemed it necessary to extend their interbank guarantee until December 31 this year.<\/p>\n

\u201cI am delighted to announce that three of the rescued banks, FinBank, Intercontinental Bank and Union Bank, have moved beyond Memoranda of Understanding (MOUs) to the signing of Transaction Implementation Agreements (TIAs) with strategic partners as of Friday 5, July 2011. Accordingly, the CBN has now extended the interbank guarantee for these three banks until December 31, 2011,\u201d he said.<\/p>\n

Moghalu explained that the signing of the three legally binding TIAs represented a significant step towards resolving the 50 per\u00a0 cent of the capital deficiency across the universe of affected banks.<\/p>\n

He was optimistic that the remaining five banks would meet the deadline, stressing that available information showed that the banks were making progress in discussions with their prospective investors, as they would soon move to the next stage.<\/p>\n

He further stated that the apex bank was working with other regulators, such as the Securities and Exchange Commission (SEC), and the Nigeria Deposit Insurance Corporation (NDIC) to ensure a smooth recapitalisation exercise.<\/p>\n

Moghalu explained that it was worthwhile that the apex bank was commended in dealing with the banking crisis, stating that no single bank had failed; no depositor had lost his deposit or had lost access to his money and also, the resolution of the crisis had been carried out at no cost to the taxpayers.<\/p>\n

\u201cIt is worth noting that this is the first banking crisis in the history of our dear country in which not a single bank has failed. In the United States alone, over 1000 banks have failed since the outset of the financial crisis. Also, unlike other countries in the banking system, the resolution of the crisis has been accomplished at no costs to the government treasury. This has been achieved through the innovative approaches, such as AMCON and the banking sector resolution costs sinking fund, consisting of financial contributions by the CBN and commercial banks themselves,\u201d he stated.<\/p>\n

Meanwhile, as part of its regulatory oversight, the CBN has endorsed the recapitalisation plans of Intercontinental Bank Plc, Union Bank of Nigeria Plc and FinBank Plc with respect to transaction implementation agreements (TIAs) signed with strategic investors.<\/p>\n

This was contained in a statement issued at the weekend by the apex bank.<\/p>\n

The CBN, in the statement, said \u201cit has conveyed its no objection to the terms of the TIA and has granted both parties approval to implement the terms of the agreement and proceed with obtaining necessary regulatory and shareholders\u2019 approvals.\u201d<\/p>\n

With the development, CBN had further extended the inter-bank guarantee till the end of December for the three banks.<\/p>\n

The extension is on the same conditions as stated in the CBN circular, dated 13 July, 2009, entitled: Guarantee for Interbank Placements and Placements with Banks by Pensions Fund Administrators.<\/p>\n

The Group Managing Director\/Chief Executive, Intercontinental Bank, Lai Alabi, while reacting to the development, in Ilorin, said, \u201cthis is great news to our customers, shareholders and other stakeholders. We believe that our customers are rest assured and guaranteed of the safety and security of their deposits with the bank, and for our shareholders, they have hope, because there is still value for them in the unfolding business combination.\u201d<\/p>\n

Alabi noted that the bank became the first to enter into a TIA for business combinations with Access Bank recently.<\/p>\n

He said all the regulatory bodies, including the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE), had been notified of the execution of the TIA.<\/p>\n<\/div>\n

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\nNo going back on September recapitalisation deadline for sick banks – CBN \u2022Endorses Intercontinental Bank\u2019s, 2 others\u2019 recapitalisation<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

|\u00a0Print\u00a0| \u00a0E-mail Written by Odidison Omankhanlen Tuesday, 19 July 2011 THE Central Bank of Nigeria (CBN) has reiterated that the September 30 deadline given to the eight rescued banks to recapitalise is sacrosanct, stressing that it will stop the interbank guarantee to the affected banks at the expiration. Addressing newsmen on the progress of the recapitalisation process and the way forward in Lagos on Monday, CBN\u2019s Deputy Governor, Financial System Stability\u00a0 (FSS), Dr Kingsley Moghalu, said there would be no extension of the deadline as enough time was given the affected banks by the apex banks to seek new investors. <\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-463621","post","type-post","status-publish","format-standard"],"yoast_head":"\nNo going back on September recapitalisation deadline for sick banks - CBN \u2022Endorses Intercontinental Bank\u2019s, 2 others\u2019 recapitalisation - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2011\/07\/18\/no-going-back-on-september-recapitalisation-deadline-for-sick-banks-cbn-\u2022endorses-intercontinental-banks-2-others-recapitalisation\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"No going back on September recapitalisation deadline for sick banks - CBN \u2022Endorses Intercontinental Bank\u2019s, 2 others\u2019 recapitalisation - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"|\u00a0Print\u00a0| \u00a0E-mail Written by Odidison Omankhanlen Tuesday, 19 July 2011 THE Central Bank of Nigeria (CBN) has reiterated that the September 30 deadline given to the eight rescued banks to recapitalise is sacrosanct, stressing that it will stop the interbank guarantee to the affected banks at the expiration. 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