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Union Bank of Nigeria Pays $800 Million Debt to Central Bank

Oct. 3 (Bloomberg) -- Union Bank of Nigeria Plc, one of eight lenders bailed out in 2009 by the country’s central bank, has paid the $800 million it was given, said outgoing Chief Executive Officer Funke Osibodu.

The Central Bank of Nigeria gave the cash as a seven-year, 6 percent note to stabilize the bank following a debt crisis, Osibodu told reporters and brokers in Lagos, the commercial capital, today. “We repaid with interest over a year ago.”

A debt crisis in 2008 and 2009 resulting from loans given to speculators on the local stock exchange and investors in the oil industry threatened the Nigerian banking system. The central bank fired eight leaders of the country’s 24 lenders and set up the Asset Management Corp. of Nigeria, or Amcon, to buy bad debts and stabilize the industry.

Amcon currently holds a 20 percent stake in Union Bank, according to Osibodu. New investors, including African Capital Alliance, hold 65 percent, while shareholders hold 15 percent, she said.

Emeka Emuwa, former head of Citibank Nigeria Ltd., will take over as CEO at Union Bank from Nov. 1, Osibodu said.

Union Bank gained 4.9 percent to 7.65 naira today. The stock has fallen 28 percent this year, compared with a gain of 26 percent in the Nigerian Stock Exchange All-Share Index.

To contact the reporter on this story: Vincent Nwanma in Lagos at vnwanma@bloomberg.net

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net

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