.......
.CBN Revokes Licence Of Bank PHB, Afribank And Spring Bank .
Saturday, 06 August 2011 00:00 By Bukky Olajide (Lagos) and Mathias Okwe (Abuja) News - National .User Rating: / 2
PoorBest
.Names Bridge Banks To Takeover
FG Assures Depositors Of Funds
AHEAD of the September 30 deadline given rescued banks to recapitalise, the Central Bank of Nigeria (CBN) yesterday announced the revocation of the licences of Afribank, Spring Bank and Bank PHB, which were yet to sign Transaction Implementation Agreements (TIAs) with investors aimed at injecting funds to capitalise them, thereby failing to show enough commitment to the process since the new teams were named in August 2009.
Announcing the move, Managing Director of Nigeria Deposit Insurance Corporation (NDIC), Ibrahim Umar, said the assets and liabilities of the three operators have immediately been taken over by bridge banks as part of efforts to ensure that the banks continue to operate under new identities.
While MainStreet Bank Limited has been licensed to take over Afribank Nigeria Plc, Keystone Bank Limited has assumed the assets and liabilities of Bank PHB and Enterprise Bank Limited will from today run Spring Bank Plc.
The three bridge banks acquired the assets and liabilities through the purchase and assumption model earlier used by the apex bank under Prof Chukwuma Soludo as CBN governor.
The three newly incorporated bridge banks by the Nigeria Deposit Insurance Corporation (NDIC) are to run the banks as going concerns to pave way for their recapitalisation by the Asset Management Company of Nigeria (AMCON).
The three affected banks were among the 10 that failed the CBN stress test conducted in June 2009, following which Wema Bank and Unity Bank have resolved their troubles, just as new core investors -? Access Bank have emerged for the other banks.
Equatorial Trust Bank, he noted, is close to recapitalisation.
The executive managements of the affected banks appointed by the CBN on August 14, 2009 have now been transferred to the NDIC. They are now to work with the NDIC, while the brand names ceased to exist and are to be replaced by the new identities.
The bridge banks are to run the former banks until new investors are found for them, which is expected to take as long as three years.
Briefing the press in Lagos yesterday, Umar said: ?The corporation is encouraged by the provision of the Bridge Bank option in our law to resolve the problems in the banking sector.?
The bridge bank option, he continued, ?is a veritable tool of enhancing depositor protection and promote confidence by ensuring seamless continuity of banking operations.?
The bridge banks, the NDIC boss assured, will operate the banks until new investors are found to capitalise them, in conjunction with AMCON, which is expected to open up negotiations with willing investors.
The action, he stated, effectively resolves the crisis in the nation?s banking industry, thereby bringing certainty and stability to the system.
He also assured that depositors have not lost their money in the reform process.
A statement by the CBN also restated its support for the action of the NDIC, which it stressed, is in exercise of its statutory powers.
The apex bank also assured depositors of the affected banks of the safety of their deposits and a seamless business continuity and ?ability of the bridge banks to meet obligations to depositors and lender-creditors as they arise, by granting all waivers forbearances and exemptions necessary for their operations.?
It also announced the extension of the inter-bank guarantees of the bridge banks until December 31, this year to ensure their continued operations and customer confidence.
Addressing journalists in Abuja yesterday, Minister of State for Finance, Dr. Yerima Lawal Ingama, explained that the action was taken ahead of time to stave off any pains on depositors.
Ngama said: ?The action, taken after due consultation by the NDIC with the Federal Government, represents an important milestone in the process of stabilising the banks and enables these banks to move forward with a more certain future and bring to closure the banking crisis that started in 2008 in Nigeria.
?The Federal Government is pleased to note that this process has not resulted and will not result in the loss of any depositors? funds and more importantly, brings stability to the financial system. In particular, I wish to emphasise that no depositors will lose one kobo.?
?In this regard, I urge all depositors of the affected banks, including the Ministries, Departments and Parastatals, to continue to transact their businesses with the respective bridge banks,?? the minister further reassured.
