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(Updates with closing prices in second paragraph.)
Aug. 1 (Bloomberg) -- Nigeria’s stock index rose for the first day in four after Ecobank Transnational Inc. agreed to buy Oceanic Bank International Plc, which was bailed out by the nation’s central bank in 2009.
The Nigeria Stock Exchange All Share Index gained 0.4 percent to 23,916.9 by the 2:30 p.m. close in Lagos, according to figures e-mailed by the Nigerian Stock Exchange. Oceanic climbed for the first day in six, adding 4.2 percent to 1 naira.
Oceanic is the fourth lender of eight rescued by the Central Bank of Nigeria two years ago to conclude a sale agreement. The central bank, which provided the lenders with 620 billion naira in 2009 after loans to equity speculators contributed to 700 billion naira of non-performing debt, has given the lenders until Sept. 30 to be recapitalized or risk being liquidated.
“The rescued banks were threatened with imminent liquidation so the announcement by ETI and Oceanic is boosting confidence in the banking sector,” David Adonri, chief executive officer of Lambeth Trust & Investment Co., a Lagos- based brokerage, said by phone today.
Union Bank Nigeria Plc will receive $750 million in new capital after the country’s second-oldest bank signed an “implementation agreement” with a group led by private equity company African Capital Alliance, it said on July 12.
Access Bank Plc signed an agreement with Intercontinental Bank Plc, one of the rescued lenders, for an acquisition, while First City Monument Bank Plc last month signed an agreement to buy Finbank Plc, whose chief executive officer was one of eight bank heads fired by the central bank in 2009 as part of its measures to curb the industry’s decline.
Asset Management Corp. of Nigeria, or Amcon, created by the central bank to buy the lenders’ non-performing loans, may become a majority shareholder in rescued banks by filling their equity shortfalls, Deputy Governor Kingsley Moghalu, said on July 1. While nationalization is not the “favored option,” it is preferable to liquidation, and if Amcon takes a majority stake in a lender, it may manage the bank for a year or two before selling it, he said.
The other lenders bailed out are Afribank Plc, Spring Bank Plc, Bank PHB Plc, and Equitorial Trust Bank, which is privately held.
Shares in Ecobank, the Togolese lender that operates in more than 30 African countries, were unchanged in Lagos trading.
--Editors: Ana Monteiro, Peter Branton
To contact the reporter on this story: Vincent Nwanma in Lagos at firstname.lastname@example.org
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