Nigerian Government Takes Over 3 Banks


The Nigeria Deposit Insurance Corporation, NDIC on Friday announced that it has taken over the running of three out of the nine banks rescued by Central Bank of Nigeria, last year ahead of the deadline the CBN gave the financial institutions to recapitalise their operation.

The three banks are Spring Bank, Bank PHD and Afribank Nigeria plc.

NDIC said it took over the banks because it is unlikely they will be able to meet the 30 September, 2011 recapitalization deadline.

“Four of the (nine) rescued banks are in the process of concluding merger plans. The three banks have not shown necessary capacity and ability to recapitalize before the September deadline,” said NDIC Managing Director Umaru Ibrahim in the statement.

NDIC also announced that assets of the three banks have been transferred to three newly formed financial institutions which have already been registered by CBN.

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Assets of Springbank were transferred to Enterprise Bank Ltd, Afribank to Mainstreet Bank Ltd, and Bank PhB were transferred to Keystone Bank Ltd, according to NDIC.

The central bank confirmed also in a statement on Friday that it had granted licenses and extended interbank guarantees to the three bridge banks and guaranteed the safety of deposits moved into the banks.

“The NDIC, in its role as insurer of deposits and in pursuance of express statutory powers, acted to ensure that public confidence in the nation’s banking system is not eroded and that depositors’ funds are safe,” the CBN statement said.

Experts believe that NDIC and the CBN may have moved ahead of the recapitalisation deadline to prevent a run on the banks by anxious depositors.

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