AMCON appoints Citigroup, Vetiva to sell Enterprise Bank
The Asset Management Company of Nigeria (AMCON) named Citigroup and Africa-focused investment bank Vetiva Capital to manage the sale of its shares in Enterprise Bank.
Enterprise Bank is one of the banks nationalized by Central Bank of Nigeria in 2009 after they were found incapable of independently sustaining business obligations..
AMCON holds non-performing assets of troubled banks.
Nigeria fully nationalised Afribank, Spring Bank and Bank PHB in 2011 when they failed to find new investors before a recapitalisation deadline. It then recapitalised them and changed their names to Mainstreet, Enterprise Bank and Keystone Bank, respectively.
Chief Executive Mustapha, AMCON, Mr. Chike-Obi, said in an interview on Thursday it planned to sell 100 per cent of Enterprise Bank through Citigroup and Vetiva but would organise the sale of the other two lenders at a later date.
He had previously said the advisers would solicit expressions of interest from prospective investors and decide on the best way to proceed.
AMCON said it was on track with its timeline to complete the sale of all three lenders by the third quarter of next year.
AMCON had said in May it would be selling off, Keystone, Enterprise and Mainstreet banks, in 2014.
The three banks were among theones found to have committed infractions after the Central Bank's audit in 2009.
Their situations were beyond mere bailouts and they had to be totally restructured, refunded and nationalised, to save depositors funds.
The Head of Corporate Communications at AMCON, Kayode Lambo, had said then that the banks are quite stable.
'The three banks are doing well and are back into profits,' he said. 'We would be selling off the three nationalised banks second quarter 2014.'
'We want to make sure we get our money back,' he added.
The Asset Management Company, otherwise referred to as the nation's bad bank, was setup to revive and stabilise Nigeria's banking industry through the purchase of Non-Performing Loans, NPLs, of the nation's banking industry.
The 2009 banking crisis in the country, which coincided with the global asset bubble, was huge, when compared to previous industry crises, according to finance experts. The crisis of solvency liquidity and confidence affected approximately 40 per cent of the total banking system. Financial firm's reports reveal the financial cost of the intervention is now in excess of N5trn, aside shareholder values destroyed.
A Financial Derivatives Company report states that AMCON has so far acquired over 10,000 NPLs worth N3.5 trillion (US$20 billion). Before its formation, NPLs ratio in the Nigerian banking industry was in excess of 35%. As of December 31, 2011 the NPL ratio had fallen to 5 per cent enabling the banks to focus on lending. In addition, AMCON injected fresh capital into eight Nigerian banks, five of which have entered into successful mergers.