The Central Bank of Nigeria (CBN) will give some loan facility to embattled Societe Generale Bank of Nigeria (SGBN) as well as Savannah Bank, to enable them effectively recapitalise and come back to business, BusinessDay can confirm.
It was learnt that each of the banks may get as much as N20 billion, but the CBN’s director of banking supervision, Tokunbo Martins who confirmed the planned, loan could not confirm this figure.
Martins however affirmed that what each bank gets would depend on the monies required to meet other funding obligations after meeting the minimum capital requirements.
She however stressed that the facility would be subject to a few conditions, including a satisfactory risk management framework and evidence of good corporate governance, among others.
Before the loans are given, the banks would also be required to have met the minimum regulatory recapitalisation requirement of N50 billion for international banking; N25 billion for national; or N10 billion for regional banking business, depending on which of the categories each of the banks wants to play in.
Making a case for the facility, Martins explained that the apex bank’s decision to intervene becomes imperative because the capital that each bank is able to raise may not be enough to meet their other funding obligations for things like infrastructure and claims to depositors, as they get back to business.
It would be recalled that embattled Societe Generale Bank Nigeria (SGBN) Limited, is to commence operations under a new name, Heritagebank, following approval by the Central Bank of Nigeria (CBN), which says the bank has met the financial requirements for returning to business.
BusinessDay learnt that International Energy Insurance (IEI) plc, which has Ifie Sekibo, as executive vice chairman, is a major shareholder, along with the Saraki family, having about 10 percent in the new bank.
BusinessDay had also reported that Societe Generale Bank, owned by the Saraki family, would come back, operating as a regional bank with N10 billion capital requirement, five years after its licence was restored to the owners through an Abuja Federal High Court judgment.
Speaking to BusinessDay on the latest development, Ugochukwu Okorafor, CBN’s director of communications maintained that the loan decision was in line with the apex bank’s mandate of maintaining financial system stability.
“We have always given forbearances. Recall that a core mandate of the CBN is to maintain financial systems stability and the Deposit Money Banks are a critical element to that mandate. The CBN has always given forbearances in injected funds as a lender of last resort where needed,” he stressed.
He maintained that the loan was nothing unusual, claiming that the apex bank had all through consolidation, always assisted the banks where necessary.
“When we give forbearances, we can also give moratorium,” he added.
The Nigerian Deposit Insurance Corporation (NDIC) recently said SGBN would soon embark on a verification exercise to ascertain its deposit base.
However, the fate of Savannah Bank, which likewise got its licence back through the same court judgment in 2009, is still uncertain, as the management is yet to get credible investors, and neither has the CBN acceded to requests for forbearance by the owners.
The CBN had extended the June 30 deadline to the bank to recapitalise.
The CBN revoked the operating licence of Savannah Bank in February 2002, while that of Societe Generale Bank Plc was revoked on January 16, 2006.
The NDIC and CBN handed over Savannah Bank to the owners on June 9, 2009, with a promise of ensuring a speedy conclusion of the necessary processes for re-opening the bank to the public.