NO fewer than seven more banks may come under the Central Bank of Nigeria (CBN) hammer, as the apex bank is set to announce the completion of the audit exercise conducted on another set of 11 banks.

According to a dependable source at the apex bank, the CBN Governor, Mr. Sanusi Lamido Sanusi, will this week announce the full results of the examination exercise which ended last week, adding that more bank chief executives would be affected.

He explained that the CBN auditors made startling discoveries on the level of rot in the banks, stating that the bank chiefs were involved in insider abuses, coupled with breach of corporate governance in their respective banks.


The source further said that the level of non-performing loans discovered in the first round of the audit report was small compared with that of the 11 banks that had just been audited.


The source also confirmed to the Nigerian Tribune that the announcement was being delayed because of last week’s London roadshow embarked upon by top officials of the CBN, adding that Sanusi had promised to submit the report to President Yar’Adua this week before taking a final decision.


Further investigations revealed that the apex bank was highly agitated as further removal of CEOs might cause a run on the banking system. Nigerian Tribune gathered that that some of the banks’ top executives who were in the know of the latest developments were making desperate moves to ensure the report did not see the light of day.

CBN Sacks Five Bank CEOs, Injects N400b
• Akingbola forewarns directors of pending sack
By Ijeoma Nwogwugwu, 08.14.2009
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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.
For more details on the state of the five banks under the CBN hammer, get a copy of THISDAY, the Satuday Paper tomorrow

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