Nigeria Corporate Banks bailed-out

Nigerian Corporate Banks are in serious state of affairs. Central Bank of Nigeria (CBN) has bailed-out four more banks and moreover sacked four of their Chief Executives.

The salvage banks are Equitorial Trust, Bank PHB, Spring Bank and Wema Bank has been given 200bn naira ($ 1.37bn) in loans and support. After an audit of their books, the Central Bank said the banks are considered to be in crucial condition.

Central Bank of Nigeria’s Governor Lamido Sansui has been scrutinizing the 24 banks and seeks to clean up the system. Five of the banks are not in the clear situation and have capital inadequacy issues.

The CBN Governor Lamido Sansui wasted no time in sacking the CEOs of the affected banks, amongst them two time winner of the African Businesswoman of the year-Cecilia Ibru of Oceanic Bank and also sealing off their premises with the armed police. The Current Governor of Nigeria is quick in replacing the sacked officials.

The management of the five banks was removed on the basis of the outcome of the audit concluded by the CBN early August. The covering ten banks of which five comprising First Bank of Nigeria plc, United Bank of Africa Plc, GT Bank Plc, Diamond Bank Plc and Sterling Bank Plc were certified fit.

The parameter on which the examination of the banks record based on is capital adequacy, liquidity, solvency and corporate governances.

Also on the advice of the CBN solicitors, the recent audit process of the respective Chief Executive Officers of the fraud banks were forced to go through the reports arising from the audit and give adequate responses.

Four of the Chief Executives have now appeared in the court charged with fraud.
Governor Lamido Sansui told the stockbrokers that the result of an audit of the country’s remaining 14 banks would be announced in early October. He added that they will appear in better health than the already examined.

The Central Bank of Nigeria said that five institutions rescued in August will run as going concerns until new investors can be found to recapitalize them
Governor Lamido Sansui added that the government has no intention of nationalizing any of the banks.

In the tenure of the former CBN Governor Chukwuma Soludo, Bank PHB and Apex bank had tried to secure N50 billion forbearance, but the request have been declined by CBN insisting to both the banks to clear its due diligence before acquiring Spring Bank.
Also the country’s Economic and Financial Crime Commission (EFCC) said nearly $300m of bad debt has been recovered, but the billions are still outstanding.