February 18, 2011 / 3:48 PM / 9 years ago

UPDATE 2-Ivory Coast's Gbagbo to reopen seized banks on Monday

* Gbagbo announces nationalisation of banks after run

* Last international bank suspends operations

(Adds anti-Gbagbo protest planned, curfew announcement)

By Tim Cocks and Ange Aboa ABIDJAN, Feb 18 (Reuters) - Ivory Coast will re-open branches of two major French banks on Monday after announcing it was nationalising them in an attempt to avert economic meltdown, the government of disputed leader Laurent Gbagbo said on Friday.

The banking system ground to a halt this week as part of the economic fallout from a dispute over the election of Nov. 28, with banks citing liquidity and security problems and shutting their doors on queues of Ivorians desperate to withdraw cash.

Gbagbo’s government announced on Thursday it would forcibly nationalise the Ivorian branches of Societe Generale, BNP Paribas, Standard Chartered and “City Bank”, an apparent reference to Citibank.

The last major international bank operating in the country, Ecobank, also suspended operations on Friday. An official at the bank told Reuters: “No bank can work alone under such conditions.”

The lack of a banking system could make it tricky for Gbagbo to pay army and public sector wages this month.

U.S. cocoa futures climbed to their highest in more than a year on Friday on the turmoil.

In Paris, the French Foreign Ministry condemned the planned nationalisations, saying they were illegal as they came “from authorities that have no legitimacy to make decisions in the name of the Ivorian state”.

World leaders have called on Gbagbo, the country’s leader for more than a decade, to step down after U.N.-certified results showed he lost the election to rival Alassane Ouattara.

But he remains in power with the backing of the army.

Major banks in the main city Abidjan were closed on Friday morning. Paramilitary forces in pickups were parked along the “Avenue des Banques”, where the main institutions have their offices, and policemen reading newspapers sat outside the entrances to a number of shuttered banks.

Ahoua Don Mello, a spokesman for Gbagbo’s government, said meetings with employees at the local units of Societe Generale and BNP Paribas would take place on Friday.

“They will open on Monday ... a statement will be issued to invite deposit holders and anyone with an account there to come so that banking relations between these banks and the clients is re-established,” Don Mello said. He did not discuss plans for Standard Chartered or Citibank.


The election, meant to restore peace to Ivory Coast eight years after a civil war, has instead led to a deadlock between Gbagbo and Ouattara and the nation is as divided as ever.

Ouattara’s government has called for Egyptian-style protests to remove Gbabgo, starting at 1000 GMT on Saturday in Abidjan. In response, Gbagbo’s army spokesman announced a curfew on Friday night from 2200 to 0600 and Saturday from 2100 to 600.

Many fear a bloodbath if protesters clash with Gbagbo’s forces.

A pro-Gbagbo court overturned the election result citing fraud, and Gbagbo has defied criticism and threats of overthrow by a West African regional military force.

Ouattara has set up a parallel government but remains holed up in a hotel, protected by U.N. peacekeepers. Meanwhile, the economy has crumbled under sanctions and a ban on exports of cocoa, the country’s main earner.

Joseph Lake, an analyst at the Economist Intelligence Unit, called the nationalisations a “desperate move”.

“We could now be entering the end game in Ivory Coast,” he added. “The financial sector will now grind to a halt and this could have consequences for the wider region. Ivory Coast is the largest player in the eight-country (West African CFA franc) zone and the financial contagion will spread.”

Gbagbo’s government said the nationalisation of banks was aimed at ensuring Ivorians were able to access their assets. Panicked Ivorians had flocked to withdraw cash this week, prompting a two-day bank run as branches closed one by one.

Five African leaders charged with finding a solution to the crisis are due to meet this weekend, but Ouattara’s camp doubts they will succeed. (Additional reporting by Lionel Laurent in Paris; Additional reporting and writing by David Lewis; editing by Andrew Roche)

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