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Last Updated: Aug 15, 2009 - 7:47:40 AM |
The Central Bank of Nigeria has moved to inject N400 billion into five
banks in the country following the decision to remove the CEOs and
executive directors of the affected banks. The affected institutions
are Intercontinental Bank Plc, Union Bank of Nigeria Plc, Oceanic
International Bank Plc, Finbank Plc and Afribank Plc.
The CEOs that have been sacked by the CBN are Erastus Akingbola
(Intercontinental Bank); Okey Nwosu (Finbank); Sebastian Adigwe
(Afribank); Mrs Cecelia Ibru (Oceanic Bank); and Bartholomew Ebong
(Union Bank).
But in a pre-emptive move, Erastus Akingbola, MD/CEO of
Intercontinental Bank who got wind of his impending removal called his
executive directors to inform them of their certain sack by the CBN.
Akingbola was said to have rushed to Ota yesterday to elicit the
support of former President Olusegun Obasanjo to intervene on his
behalf and call President Umaru Yar’Adua to stop the CBN from carrying
out the sack.
However, the CBN governor, Sanusi Lamido Sanusi, who made this decision
known this morning at the Emergency Bankers’ Committee convened by the
CBN in Lagos, explained exclusively to THISDAY that the decision was
being taken to safeguard the financial sector from systemic collapse.
He said following the audit exercise conducted by CBN’s examiners it
was discovered that five of the banks had accumulated margin loans of
N500 billion, among other loans, that had gone bad and eroded their
shareholders’ funds.
“Some of these banks are quite large institutions and they have been
mismanaged, so we had to move in to send a strong signal that such
recklessness on the part of bank executives will no longer be
tolerated.”
He said the CBN had obtained the approval of the President to inject
N400 billion into the affected banks to shore up their tier 2 capital
to minimum acceptable levels.
Sanusi added that the funds being injected by the CBN was just
temporary and does not translate to the government taking a stake in
the five banks, as the interim management will be given a period to
recapitalise the affected institutions, following which the N400
billion will be paid back to the CBN.
On how the CBN will prevent a run on the banks and create panic in the
economy, Sanusi said the CBN intends to make it clear that the money
being injected by the reserve bank as well as the decision to guarantee
interbank placement should allay depositors’ concerns.
The CBN, he stated, stands ready to ensure that no bank collapses in
the country, but will encourage them to seek for funds to raise fresh
capital and merge with stronger banks.
He said an interim management and board for the affected banks will be
put in place to run the institutions until they are taken over by new
management teams and owners.
Source:Ocnus.net 2009
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