Nigeria sets deadline for rescued bank deals

By Nick Tattersall and Camillus Eboh

LAGOS/ABUJA (Reuters) - Nigeria's rescued banks have until the end of September to reach recapitalisation deals with new investors or face liquidation if they refuse to accept funds from state bad bank AMCON, the central bank said on Tuesday.

Nigeria in 2009 injected $4 billion into nine lenders deemed by auditors to have become so weakly capitalised that they posed a risk to the entire banking system in sub-Saharan Africa's second-biggest economy.

The AMCON asset management company was set up to restore them to zero shareholders' funds, while new investors have been sought to bring them up to minimum capital adequacy.

Where lenders fail to reach merger agreements, the central bank has said AMCON could inject funds, effectively nationalising them, but there has been resistance to this from some bank directors and shareholders.

"We can't keep the process open indefinitely," Central Bank Governor Lamido Sanusi told Reuters on Tuesday.

"If there is no agreement (with new investors), clearly option B is AMCON recapitalisation and option C liquidation."

Four of the banks -- Afribank, Finbank, Intercontinental Bank and Union Bank -- have already signed merger deals.

Two more -- Bank PHB and Oceanic Bank -- have held talks with potential suitors but have so far been unable to agree commercial terms.