CBN fires Adenuga and three bank CEOs

The Central Bank of Nigeria, on Friday, fired the chief executive officers of three of the 14 remaining banks at the conclusion of stress audits of their operations.

Like the first five banks whose chief executives were fired in the first round of audit of 10 banks, the three were immediately replaced, with one of the replacements bringing to three the number of female chief executives of commercial banks.

The sacked

Those affected were Francis Atuche, Charles Ojo, and Ike Oraekwotu, who were relieved of their positions as managing directors/ chief executives of Bank PHB, Springbank and Equatorial Trust Bank.

They are to be replaced by Cyril Chukwumah for Bank PHB Plc; Sola Ayodele for Spring Bank Plc. and G.O. Folayan for Equitorial Trust Bank Plc.

Wema Bank was also found to be in a grave situation, however the CBN noted that the bank came under a new ownership and management in June 2009, which “took over a bank already in a grave situation and should not be held responsible for the present condition of the bank.”

The nine banks that survived the CBN litmus test, according to its corporate affairs head, Mohammed Abdullahi, include Access Bank Plc, Citibank Nigeria Limited, Ecobank Nigeria Plc, Fidelity Bank Plc, First City Monument Bank Plc, Skye Bank Plc, Stanbic IBTC Bank Plc, Standard Chartered Bank Limited and Zenith Bank Plc. Unity Bank, which is the tenth was, according to the CBN, adjudged to have insufficient capital but not in grave situation because it has a healthy liquidity position.’’

The rescue

To help enable the affected banks pull out of their grave positions, the central bank announced a provision of the sum of N200 billion as liquidity support and long term loans to enable “them continue normal business, while pursuing re-capitalisation options.”

The announcement by the bank brings to an end weeks of anxiety that trailed the previous decision to sack the managements of Oceanic Bank, Intercontinental Bank, Union Bank, Afribank and Finbank at the end of the first phase of the special examinations on the financial health of 10 banks.

The CBN said its special examination focused primarily on assessing the health of the banks with particular emphasis on their liquidity, capital adequacy and corporate governance.

The report of its committee, it disclosed, revealed that the situation in the four affected banks was grave enough for Lamido Sanusi Lamido, the CBN Governor, to exercise his powers under Sections 33 and 35 of the Banks and Other Financial Institutions Act 2004, by taking steps aimed at arresting the situation.

These steps, according to Mr. Abdullahi, include the immediate removal of the managements of the three banks along with their executive directors, and appointment of new chief executive officers. New executive directors would be appointed for these banks in due course.

Other decisions included the removal of all non-executive directors in Spring Bank Plc and the sack of Mike Adenuga, jnr. from his position as non-executive director of Equitorial Trust Bank Plc.

It gave the boards of Wema Bank Plc and Unity bank till June 30 next year to recapitalise, since the former came under new ownership and management only last June, while there were no indication of poor corporate governance practices by the latter.

It assured on its readiness to work with them to ensure a successful completion of their recapitalisation exercises.

Progress report

The central bank expressed happiness on the progress made in the previous effort to assist the five banks with insufficient capital in their loan recovery efforts, saying over N110 billion of previously non-performing loans have been recovered by the five banks as at 25 September 2009.

“The CBN reiterates its commitment to stand by all Nigerian banks and work with their respective boards, managements and other stakeholders to restore the stability of the financial system and thus ensure that our banks are able to effectively play their role in economic growth and development,” it said, adding that the latest development brings to an end the first phase of the process of restoring financial sector stability.

“Ongoing action will focus on building capacity within the regulatory regime,” the bank said. “Fast-tracking the implementation of risk-based, consolidated and cross border supervision frameworks; easing the flow of credit, particularly to the real sector of the economy; improving governance structures and practices in the financial services sector; and improving confidence in the economy in general.”


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