February, 10 , 2010

The European Union’s long-term lending arm is to provide €240m to three Nigerian banks to boost their ability to finance much-needed infrastructure projects, in a vote of confidence for dramatic reforms to the country’s troubled banking sector.The European Investment Bank’s biggest funding package in sub-Saharan Africa to date will be shared equally between First Bank and Guaranty Trust Bank, two of Nigeria’s best-regarded lenders, as well as to Stanbic IBTC, the local subsidiary of South Africa’s Standard Bank Group, the continent’s largest bank by assets, officials said.

Once hailed as a model emerging market financial sector following consolidation that began in 2004, Nigerian banking has been humbled by a collapse in confidence from 2008 when massive loans to stock market and oil speculators soured as prices crashed.Since taking office in June, Lamido Sanusi, the new central bank governor, has bailed out nine of Nigeria’s 24 banks to the tune of $4bn and fired the management at eight of them, part of efforts to overhaul the lax practices that precipitated the crisis.

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