Nigeria bailout won't push deficit over 3pct: c.bank

By Mark John

DAKAR (Reuters) - Nigeria's bank bailout will not push its fiscal deficit above three percent of GDP and all of the rescued banks will survive in one form or another, Central Bank Governor Lamido Sanusi said on Thursday.

Nigeria has injected around 600 billion naira into the banking system since mid-August after an audit found nine institutions were facing a grave liquidity crisis.

"In our estimation, the total cost of the bailout ... would still leave us with a fiscal deficit of no more than 3 percent given where we are today," Sanusi told a news conference in the Senegalese capital, Dakar.

A budget office document seen by Reuters last month shows Nigeria expects it budget deficit to be an estimated 3.02 percent of GDP this year but to widen next year to around 3.28 percent as it tries to spend its way out of the global downturn while economic growth slows.

The central bank injected 400 billion naira into Afribank, Finbank, Intercontinental Bank, Oceanic Bank and Union Bank in August and sacked top executives after the audit found lax governance had left them so weakly capitalised they posed a systemic risk.

Two months later it said it was providing 200 billion naira to four more banks -- Bank PHB, Equitorial Trust Bank, Spring Bank and Wema Bank -- also judged to be facing serious liquidity problems.

"Each of these banks will survive in one form or another," Sanusi said, adding they could raise capital either through public offers or mergers with a stronger bank.

"If the merger involves some form of resolution cost, the federal government will be ready to bear some of that cost."