UPDATE 2-Nigeria president to pick Sanusi as cenbank governor

* Yar'Adua to pick First Bank executive as cenbank chief

* Appointment needs to be confirmed by Senate

* Sanusi has reputation for strong corporate governance

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By Felix Onuah

ABUJA, June 1 (Reuters) - Nigerian President Umaru Yar'Adua has chosen First Bank (FBNP.LG) managing director Lamido Sanusi to be central bank governor for the next five years, the junior finance minister told Reuters.

Remi Babalola said Yar'Adua had picked Sanusi to replace current governor Chukwuma Soludo, whose term has expired. The Senate must confirm the appointment.

"(The appointment letter) is being sent today so that the Senate can fast track his confirmation before they go on recess on Thursday this week," Babalola said.

Presidential spokesman Olusegun Adeniyi confirmed that Yar'Adua would be sending his central bank choice to the Senate on Monday, but would not say who it would be.

Sanusi, who has a reputation for strong corporate governance and conservative lending strategies, was widely seen as the favourite to replace Soludo.

Sanusi took over as managing director of First Bank in January after previously serving as head of risk management.

He has worked for more than two decades in the Nigerian banking industry, including a stint at United Bank for Africa (UBA) (UBA.LG), where he spearheaded the bank's drive to comply with Basel 2 capital adequacy requirements.

Sanusi will face a heady list of investor expectations -- steering Africa's biggest oil producer and most populous nation through the global downturn, tightening banking supervision and forging ahead with monetary policy reform.

Analysts welcomed his selection.

"Sanusi is able to bring to the table his experience as a banker and is in a position to tackle the issues facing the banking sector from the perspective of an insider who is well-acquainted with the current regulatory system ," said Razia Khan, head of Africa research for Standard Chartered.

Sanusi is expected to continue his predecessor's banking reforms, which created some of Africa's biggest financial services institutions, deepening the country's capital markets and attracting a new wave of foreign investment.