CBN revokes licenses of Bank PHB, Afribank, Spring Bank

Minister of State for Finance, Dr. Yerima Lawan Ngawa said by Monday, the above mentioned banks would revert to their new names. According to him, the Federal Government is supporting the Decision of the NDIC to bridge theses banks because it would ensure that the operations of the affected banks are not interrupted or destabilized […]

Minister of State for Finance, Dr. Yerima Lawan Ngawa said by Monday, the above mentioned banks would revert to their new names. According to him, the Federal Government is supporting the Decision of the NDIC to bridge theses banks because it would ensure that the operations of the affected banks are not interrupted or destabilized in any way.

 

“The action was taken after due consultation by the NDIC with the Federal Government because it represents an important milestone in the process of stabilizing these banks and it enables the banks to move forward with a more certain future and bring to closure the banking crisis that started in 2008.

Thus NDIC under “the Bridge Bank Mechanism” has handed the three banks to new license banks to manage. Under the Bridge Bank Mechanism, Mainstreet Bank Limited has assumed the assets and liabilities of Afribank Plc, Keystone Bank Limited has assumed the assets and liabilities of Bank PHB and Enterprise Bank Limited has assumed the assets and liabilities of Spring Bank plc.

Briefing newsmen in Lagos yesterday, the Managing Director of NDIC Alhaji Ibrahim Umar assured that depositors’ funds are safe and the CBN has endorsed the move. According to the NDIC boss, the NDIC will operate the bridge banks untill such a time when it will engage AMCON with a few to recapitalising the banks adding that NDIC by law can run the banks for up to three years.

Alhaji Umar said the takeover is not nationalisation irrespective of the fact that NDIC is the promoter of the new license banks. He also noted that the CBN or federal government hasn’t introduced fresh funds into the newly formed banks. According to him, the management of the banks is now vested in the NDIC adding that the jobs of the staff are secured. On shareholders’ investment in the banks, he explained that the Nigerian Stock Exchange and the Security and Exchange Commission (SEC) will soon state the position of their shares

The CBN in a statement endorsed the NDIC move and said the CBN will guarantee the inter-bank obligations of the bridge banks untill December 31, 2011 to ensure continued operations and customer confidence. It said baking licenses have been issued the new banks and that effectively rests Bank PHB, Afribank and Spring Bank.