Nigerian Central Bank takes control of five banks

Governor Lamido Sanusi

Mr. Lamido Sanusi, Nigeria’s not-so-long-ago-appointed Central Bank Governor, a risk-management person, is at it. From Financial Times:

“A few Nigerian banks, mainly due to huge concentrations in their exposure to certain sectors … but [also] due to a general weakness in risk management and corporate governance, have continued to display signs of failure,” Mr Sanusi said.

The banks are:

1. Afribank Plc
2. Intercontinental Bank Plc
3. Union Bank of Nigeria Plc
4. Oceanic International Bank Plc
5. FinBank Plc

The Central Bank sacked the MDs/CEOs of the banks and appointed new ones. They are also going to get some more loan from the government. From NEXT:

Backed by the confirmation of CBN governor, Sanusi Lamido, that N400 billion [$2.6bn, €1.8bn, £1.6bn] is to be injected into the five banks whose chief executives and management were sacked this morning to “enable them continue normal business”, industry insiders have asked shareholders to stop listening to and spreading rumours.

I followed the news as it unfolded on NEXT newssite. See this, this and this. Don’t forget to read the comments too.

From BBC:

Mr Sanusi said the five banks had accounted for almost 90% of exposure to the central bank’s so-called discount window, which allows banks to borrow in the short-term from the central bank to meet their needs.

“The excessively high level of non-performing loans in the five banks … was attributable to poor corporate governance practices, lax credit administration processes and the absence or non-adherence to credit risk management practices,” he said.

Addendum
It is really nice to have a news website that is nimble on its feet. Nigerian newspapers are going to have to learn from NEXT. I think NEXT too has to find a way of dealing with a lot of traffic to their website. It must have been hit by so much request yesterday that at some point it was almost impossible to get it to load.