By OMOH GABRIEL
Central Bank of Nigeria, yesterday, released three categories of banking licences to banks operating in the country in line with the modified universal banking scheme. In the new arrangement, nine banks were given International Banking licences, six National Banking licences and two regional banks were granted licence to operate.
CBN also said that it has approved for First Bank, FCMB, Stanbic IBTC and UBA to keep subsidiaries and adopt a holding company structure.
Kingsley Moghalu, Deputy Central Bank Governor in charge of financial system stability at a briefing in Abuja, said the banks granted International Banking licence status are Access Bank, Diamond Bank, Fidelity Bank, First Bank, First City Monument Bank (FCMB), Guaranty Trust Bank (GT Bank), Skye Bank, Zenith Bank, United Bank for Africa
Those granted national banking licences are mainly foreign banks which includes Citi Bank, Ecobank Stanbic IBTC, Standard Chartered, which have no need for international banking licence as their parent-body are outside the counter and; Sterling Bank and Unity Bank
Granted regional banking licences, according to Moghalu are Equitorial Trust Bank and Wema Bank. CBN said the rescued banks have until the end of September to reach recapitalisation deals with new investors or face liquidation if they refuse to accept funds from AMCON.
“We can’t keep the process open indefinitely,” Central Bank Governor Lamido Sanusi, told Reuters. ”If there is no agreement (with new investors), clearly option B is AMCON recapitalisation and option C liquidation.”
“September 30 is a very firm deadline for the consummation of all mergers and acquisitions,” Moghalu added.
“Where this is not met, the CBN will be free to exercise the option of liquidation,” he said. “The central bank is taking much more of a hardline approach on the banking system clean-up,” said Razia Khan, head of Africa research at Standard Chartered.
”It does show strong resolve on the part of the regulator to see this through, which presumably they could only be doing with Jonathan’s backing. So, it’s a good early sign of the commitment to reform under the new administration,” she said.
CBN in 2009 injected N620 billion into nine banks deemed by auditors to have become so weakly capitalised that they posed a risk to the entire banking system in sub-Saharan Africa’s second-biggest economy.
The asset management company was set up to restore them to zero shareholders’ funds, while new investors have been sought to bring them up to minimum capital adequacy.
Where banks fail to reach merger agreements, the central bank has said AMCON could inject funds, effectively nationalising them, but there has been resistance to this from some bank directors and shareholders. The CBN stopped issuing universal banking licences last year and said it would enforce new minimum capital requirements for different categories of lender in a bid to avoid a repeat of 2009’s near collapse of several banks. International banks require minimum capital of 50 billion naira ($320 million) under the new regime. National banks require minimum capital of 25 billion naira while regional banks, which can operate in only 6-12 of Nigeria’s 36 states, are required to have 10 billion naira.
Under the new regulations, lenders are required to either sell non-core businesses or form a holding company if they intend to carry out asset management and capital market activities.
According to the CBN banks granted national and regional banking licences under Nigeria’s new licencing regime have until May 2012 to divest non-banking subsidiaries, deputy central bank governor Kingsley Moghalu said.
