Others • Created October 3, 2009 00:00

CBN sacks MD of BankPHB, 2 others – Gives Unity, Wema 9 months to recapitalise – Injects N200bn into industry

It immediately appointed new MDs for the affected banks. The new appointees are Mr. Cyril Chukwumah for Bank PHB Plc, Mr. G.O.Folayan for ETB and Mrs Sola Ayodele for Spring Bank. This development brings the numbers of bank MDs sacked by the CBN in its resolve to sanitise the banking sector to eight. The chief […]

CBN sacks MD of BankPHB, 2 others – Gives Unity, Wema 9 months to recapitalise – Injects N200bn into industry
CBN sacks MD of BankPHB, 2 others – Gives Unity, Wema 9 months to recapitalise – Injects N200bn into industry

It immediately appointed new MDs for the affected banks. The new appointees are Mr. Cyril Chukwumah for Bank PHB Plc, Mr. G.O.Folayan for ETB and Mrs Sola Ayodele for Spring Bank. This development brings the numbers of bank MDs sacked by the CBN in its resolve to sanitise the banking sector to eight.

The chief executives of Union Bank of Nigeria, Intercontinental Bank Plc, FinBank Plc, Afribank Bank Plc and Oceanic Bank International were sacked by the CBN on August 14th for having non-performing loans of N780 billion. CBN injected N420 billion into them.

Two other banks out of the fourteen banks whose audited report were released yesterday are directed to recapitalise by June 30, 2010. The banks are Unity Bank Plc and Wema Plc. Nine of the fourteen banks were given clean bills of health as CBN concluded its audit for the twenty four banks in the country. The banks are Access Bank, Citibank, Ecobank Nigeria Plc, Fidelity Bank Plc and First City Monument Bank Plc. Others are Skye Bank Plc, Stanbic IBTC Bank Plc, Standard Chartered Bank Plc and Zenith Bank Plc.

The report said that Unity Bank was adjudged to have insufficient capital but not “in grave situation because it has a healthy liquidity position.” The measures include the removal of the MDs of three banks and all their Executive Directors. “New Executive Directors will be appointed in due course”, the statement said.

CBN also sacked all the Non-Executive Directors of Spring Bank Plc, while Dr. Mike Adenuga Jr. was removed as the Non-Executive Director of ETB.

CBN said that Wema Bank Plc was asked to recapitalise by June 30, 2010 because it came under new ownership and management in June and the new team “who took over a bank already in a grave situation should not be held responsible for the present condition of the bank.” CBN said that Unity Bank was asked to recapitalise even though it was adjudged to have insufficient capital for its current level of operations but “was adjudged to have a healthy liquidity position and with no indication of poor corporate governance practices.”

Other measure taken by CBN to help the affected banks was “the provision of a total of N200 billion as liquidity support and long terms loans for the four banks adjudged to be in a grave situation to enable them continue normal business, while pursuing recapitalisation option.”

The statement said that President Umaru Musa Yar’adua has directed the Minister of Finance and the Central Bank Governor to liaise with the Attorney General of the Federation, the National Assembly and other relevant stakeholders to fast track the process of establishing an Asset Management Company. “The formation of this company should facilitate an improvement in banking sector liquidity, protection of the earnings of banks from further erosion on the capital market and its participants. This should help a much-needed revival of the Nigerian Capital Market”, CBN said.


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