Nigeria Approves International Licenses for Nine Banks

Nigeria’s central bank gave approval in principle to nine lenders’ applications for international operating licenses, Deputy Governor Kingsley Moghalu said.

The lenders that won approval for international licenses are Access Bank Plc, Diamond Bank Plc, Guaranty Trust Bank Plc, Fidelity Bank Plc, First City Monument Bank Plc, First Bank of Nigeria Plc, Skye Bank Plc, United Bank for Africa Plc and Zenith Bank Plc, Moghalu told reporters today in the capital, Abuja. Six banks were granted national licenses while another two were given regional licenses.

“We want to focus banking now on a narrow basis so that it will enhance the stability of the banks and will enable much closer monitoring of Nigeria’s banks in terms of supervision and regulation,” he said.

Lenders operating in Nigeria were forced to reapply for licenses after the central bank scrapped the existing universal-banking system, allowing them to offer multiple services, last year as part of an overhaul of the industry.

Citibank Nigeria, Ecobank Nigeria Plc, Standard Chartered Plc’s Nigeria unit, Sterling Bank Plc, Unity Bank Plc and Stanbic IBTC Plc will operate under a national license, while Equatorial Trust Bank Plc and Wema Bank Plc were granted regional licenses.

Holding Companies

Four lenders -- First Bank, Stanbic IBTC, First City Bank and United Bank for Africa -- will be allowed to operate as holding companies, while banks seeking “mono-line banking licenses” have been given a May 2012 deadline to divest all non-banking related enterprises, Moghalu said.

Lenders that the central bank bailed out in 2009 have until Sept. 30 to finalize recapitalization or merger plans, he said.

“Where a bank has not completed that process by this date, and especially where the reason is because vested interests are stalling the process, the central bank will be quite free to exercise the option of liquidation,” Moghalu said.

The bank fired the chief executive officers of eight of Nigeria’s 24 lenders in 2009 after a debt crisis threatened the industry with collapse and provided a 620 billion-naira ($4 billion) bailout.

The central bank also set up Asset Management Corp. of Nigeria, or Amcon, to buy bad debts from the nation’s lenders and recapitalize the rescued banks before matching them with potential buyers.

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