CBN Extends Interbank Guarantee for ETB

The Central Bank of Nigeria (CBN) said it has extended the interbank guarantee for Equitorial Trust Bank Limited (ETB) to December 31, following the successful signing of a Transactions Implementation Agreement (TIA) between the rescued bank and Sterling Bank Plc.

A statement from the Head, Corporate Communications, CBN, Mr. Mohammed Abdullahi, made available to THISDAY at the weekend, explained that the extension granted to the bank was based on the same conditions given to other banks that had also attained the advanced stage in their recapitalisation journey.

Precisely, he pointed out that the extension was on the same conditions as stated in the CBN circular dated 13th July, 2009 titled “Guarantee for Interbank Placements and Placements with banks by Pension Fund Administrators.”

The management of ETB and Sterling Bank had last week, officially announced the signing of a TIA.
Both institutions had revealed plans to merge their business operations. Both banks had explained in an advertorial in THISDAY that the execution of the TIA will lead to the recapitalisation of ETB and the merger of both financial institutions.

“The signing of these legally binding TIAs for the five banks and full capitalisation of the three new banks by the Asset Management Corporation of Nigeria (AMCON), has resolved the issue of the combined negative asset value of the eight CBN intervened banks,” the CBN spokesman said.

He however, maintained that there is no going back on the September 30 deadline for the recapitalisation of all the five banks that have signed their TIAs.

It will be recalled that the apex bank had earlier extended the interbank guarantee for Union Bank Plc, Intercontinental Bank Plc, Finbank Plc and Oceanic Bank Plc after signing their respective TIAs with their preferred investors and merger partners.

ETB and Sterling Bank had stressed that the complementary strength of both institutions underscored the compelling merit of the transaction and will provide enhanced growth prospects as well as attractive financial returns for all stakeholders.

“The parties will now commence the process of a scheme of merger, which will now be subject to approval of the shareholders of Sterling Bank Plc and ETB as well as the approval of the Central Bank of Nigeria , the Securities and Exchange Commission (SEC), the Nigerian Stock Exchange and the Federal High Court,” they had explained.