European bank bids for three bailed-out banks

The European Investment Bank (EIB) yesterday in Abuja indicated an interest in acquiring three of the eight banks that recently failed the Central Bank of Nigeria (CBN) stress test.

A delegation from the bank led by its Vice President, Investment Operations in Africa, Plutarchos Sakellaris, told the CBN Governor, Sanusi Lamido Sanusi, during a courtesy visit to his office, that the organisation’s interest in the three banks was buoyed by its assessment of the Nigerian banking sector as one of the best investment destinations in Africa.

The delegation, which accompanied the European Ambassador to Nigeria, Phillipe Pierre, however, refused to reveal the identity of the affected banks, saying it would only be announced on Thursday when its five-day visit to Nigeria is expected to end.

The Vice President, Goodluck Jonathan, has welcomed the initiative, asaying that it will help finance projects in the energy sector as well as encourage small and medium scale enterprises in the country.

Addressing the delegation in the State House yesterday, Mr. Jonathan said:

“We welcome the EIB’s assistance in financing infrastructural development projects in the country, especially in the power sector.

“We must increase our output in the power sector. We also need expansion of the agricultural sector as well as small and medium scale enterprises to create jobs for the youths.”

Mr. Pierre confirmed that the EIB is eager to venture into other sectors of the economy, such as agriculture, oil and gas and any other viable economically-sustainable sector.

According to Mr. Sakellaris, the decision to invest in the Nigerian financial sector at this time was to further cement the confidence which the long-term investment arm of the European Union (EU) has in the future of the Nigerian economy.

Over time, he said, the bank has invested over €820million in diverse sectors of the Nigerian economy, including the 2005 financing of the Obajana Cement factory, owned by the Dangote Group in Kogi State.

“In over two-thirds of these lending operations, we worked closely with other institutions, notably the World Bank, African Development Bank (ADB), International Finance Corporation (IFC), and European Commission (EC), to provide funding for about 29 projects in sub-Saharan Africa last year,” Mr. Sakellaris disclosed.

Commitment to projects

He said the bank, which is the long-term lending institution of the EU, with shareholders in 27 EU member- states, has been active in Africa for over 40 years, pointing out that the financial sector, including banks and private equity funds and microfinance projects, were some of the other major areas that the bank had invested in in the past.

Mr. Sakellaris disclosed that the plans for the three banks will demonstrate EIB’s interest and confidence in the Nigerian economy, adding that this highlights its commitment to focus on projects that would not only promote economic growth, but also foster private development in the region.

The Vice President assured the EIB that the government would continue the ongoing banking reforms in order to ensure that banks are professionally managed.