Nigeria may lift ban on foreign bank ownership: c.bank

By Randy Fabi

ABUJA (Reuters) - Nigeria's new central bank governor said on Monday he is in favour of easing restrictions on the foreign ownership of local banks, saying this could allow fresh capital and risk management expertise into the sector.

Lamido Sanusi, former managing director of Nigeria's First Bank, who was appointed central bank governor at the start of the month, told Reuters that limiting foreign ownership of Nigerian banks was "not a sustainable policy".

"We do need the capital to come in, we do need the skills on ... risk management and secondly at this time we may need to recapitalise banks. What you want to do is open up all the possibilities," he said in the capital Abuja.

The central bank currently has to approve the acquisition of more than 5 percent of a Nigerian bank by a foreign firm. Sanusi said his predecessor imposed an additional restriction that no foreign bank could own more than 10 percent of a Nigerian one.

He said he had no timeframe for altering the rules but said they were unnecessarily restrictive.

"The central bank does need to approve any takeover more than 5 percent, so frankly it is unnecessary to have a 10 percent restriction," he said on the sidelines of a summit of leaders from regional economic bloc ECOWAS.

Nigeria, Africa's second biggest economy and its most populous nation, is home to some of the continent's biggest banks. But the global downturn has taken its toll.

Risk management and disclosure levels have failed to keep pace with explosive balance sheet growth in the wake of a wave of consolidation in the sector four years ago, fuelling distrust between counterparties as the environment has deteriorated.