|
Bank PHB, Afribank, Spring Bank nationalised
By
Akinola AJIBADE Lagos and Nduka Chiejina, Abuja The
Nation Sat Aug 6,2011
The Central Bank of Nigeria (CBN) on Friday announced the
revocation of the licenses of Afribank, Spring Bank and Bank
PHB.
The move, according to the Managing Director of the Nigeria
Deposit Insurance Corporation (NDIC), Ibrahim Umar, became
necessary because the affected banks had failed to show enough
commitment to the process of recapitalisation since new
management teams were named
in August 2009.
The revocation came ahead of the September 30 deadline given
rescued banks to recapitalise.
Announcing the revocation during a press briefing in Lagos
yesterday, Umar said the assets and liabilities of the operators
of the three banks had been immediately taken over by bridge
banks as part of efforts to ensure that the banks continued to
operate under new identities.
While MainStreet Bank Limited has been licenced to take over
Afribank Nigeria Plc, Keystone Bank Limited has assumed the
assets and liabilities of Bank PHB while Enterprise Bank Limited
takes over Spring Bank Plc.
The three bridge banks acquired the assets and liabilities
through the purchase and assumption model earlier used by the
apex bank when Chukwuma Soludo was the CBN governor.
The three banks were among the 10 that failed the CBN stress
test conducted in June 2009, following which Wema and Unity
banks resolved their troubles.
New core investors,Access Bank, had emerged for
Intercontinental; First City Monument Bank for Finbank while
Ecobank Transnational signed a merger agreement with Oceanic
Bank International.
Umar said while core investor had emerged for Union Bank,
Equitorial Trust Bank was close to recapitalization.
The executive managements of the affected banks appointed by the
CBN on August 14, 2009 have now been transferred to the NDIC.
They are now to work with the NDIC, while the brand names cease
to exist and will be replaced with the new identies, the NDIC
boss stated.
The bridge banks are to run the banks until new investors are
found for the three banks. This is expected to take as long as
three years.
"The corporation (NDIC) is encouraged by the provision of the
bridge bank option in our law to resolve the problems in the
banking sector," Umar said.
The bridge bank option, he continued, "is a veritable tool for
enhancing depositor protection and promoting confidence by
ensuring seamless continuity of banking operations."
The bridge banks, Umar assured, will operate the banks until new
investors are found to capitalise them in conjunction with the
Asset Management Corporation of Nigeria (AMCON).
AMCON, he continued, is expected to open up negotiation with
willing investors, adding that the action effectively resolves
the crisis in the nation’s banking system, bringing
certainty and stability into it.
He also assured that no depositor would lose their money in the
reform process.
A statement by the CBN also restated the apex bank’s support for
the action of t he NDIC, which is in exercise of its statutory
powers.
The CBN also assured depositors of the bridge banks of the
safety of their deposits and the seamless business continuity
and "ability of the bridge banks to meet obligations to
depositors and lender-creditors as they arise, by granting all
waivers forbearances and exemptions necessary for their
operations."
Also, the CBN announced the extension of the inter-bank
guarantees of the bridge banks until December 31, 2011 to ensure
their continued operation and customer confidence.
At about the time the NDIC boss was speaking in Lagos, the
Federal Government was also giving its tacit approval to the
measures in Abula.
Addressing journalists in Abuja yesterday, the Minister of State
for Finance, Dr. Yerima Lawan Ngama, disclosed that the
government had thrown its weight behind NDIC’s decision "to
organise and incorporate bridge banks that will take over these
banks.’’
The
minister also disclosed that all three banks will wear their new
names on Monday. The
bridge banks are Mainstreet Bank for Afribank, Keystone Bank for
Bank PhB and Enterprise Bank Limited for Spring Bank. By this
development, "on Monday these banks will metamorphose into new
entities," the minister revealed.
Ngama said: "The action was taken after due consultation by the
NDIC with the federal government." He then described the action
as representing an important milestone in the process of
stabilising the affected banks.
The action, the minister added, "will enable these banks to move
forward with a more certain future and bring
to
closure the banking crisis that started in 2008 in Nigeria."
The federal government, the minister pointed out, was pleased
the process of creating bridge bank to take over these three
banks "has not resulted and will not result in the loss of any
depositors’ fund and, more importantly, brings stability to the
financial system." He emphasised that that no depositor will
lose one kobo.
In
addition thefederal government has called on all ministries,
departments and
parastatals banking with the affected banks "to continue to
transact their business with the respective bridge banks.
Asked
why the federal government could not wait till the September 30
deadline for the full recapitalisation of the banks, the
minister
of state for finance said it was better to pre-empt the banks
than wait till September 30 .
|
