Nigeria’s Recapitalization of rescued banks approved

The Assets Management Corporation of Nigeria (AMCON) has set aside an additional US$ 5 billion to recapitalize the five rescued banks.

The injection of the capital would restore investor confidence in the banks, adding that it would also make the affected banks to regain their pride of place in the banking sector.

The banks in question are:

Union Bank: Its shareholders approved a US$750 million injection by a group of private equity investors led by African Capital Alliance who would own 60 percent of its equity.

Finbank: Now merges with First City Monument Bank (FCMB).

Oceanic International Bank: will be recapitalized by Ecobank Transnational Inc. (ETI) and merged with its Nigerian subsidiary Ecobank.

Equatorial Trust Bank

Intercontinental Bank: will merge with Access Bank.

Some analysts feared that injecting such a huge amount into the economy would fuel inflation, an argument countered by a former director of Central Bank of Nigeria (CBN), Dr. Titus Okunronmu. He warned, however, that if the issue of regulation was not enforced by the CBN, no amount of money injected into the sector would improve the banks’ liquidity position.”