South Sudan has spent $9.5 million to bail out the autonomous region's biggest bank, privately owned Nile Commercial Bank Plc, after an ambitious expansion forced a restructuring.
NCB has received around 15 million Sudanese pounds ($7.5 million) from the south's central bank and 4 million ($2 million) from the government to save it, said NCB Operations Manager Samson Arap Ephraim. "We lent a lot of money to the public around 15 million Sudanese pounds and to state government, which basically bankrupted us," said Ephraim.
He added that NCB had also incurred costs it could not afford to set up 23 branches across the south. A north-south Sudan peace agreement signed in 2005 ended more than 20 years of war. Since then the largely underdeveloped south has been struggling to provide services, including banking, for the first time in many areas.
Under the deal, the mostly Muslim north continues its Islamic banking system while the south adopts conventional banking. NCB's 100,000 shares are currently owned by Sudanese and international individuals and companies, said Ephraim. But the bank expects government investment in the institution soon.
"The government as of now has not entered officially but has promised to take 60 percent of the shares," he said. He added that some government loans would later be converted into shares in the unlisted bank.
Ephraim said members of the Sudan People's Liberation Movement (SPLM) had been shareholders in the bank from its inception, when the SPLM was still a rebel group prior to the January 2005 peace deal. The SPLM now dominates the semi-autonomous southern government and parliament.
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