CBN hammer may fall on these finance houses

In a released made available to the public, the Central Bank of Nigeria (CBN) has made known its intention to revoke the operating licences of 182 financial institutions operating in the country. CBN announced this barely a week after its revoke Skye Bank’s operating license.

According to Nairametrics, The 182 financial institutions which according to the apex bank, cut across different states of the country include – 154 microfinance banks; 6 primary mortgage banks, and 22 finance companies. CBN said 62 of the microfinance banks had already closed shops; 74 became insolvent; 12 were terminally distressed; while six voluntarily liquidated.

The CBN listed the primary mortgage banks for revocation as Accord Savings and Loans Limited in Lagos that failed to recapitalise; and Ahocol Savings and Loans Limited in Anambra (state government-owned) that closed shop.

Other mortgage banks for revocation are Trans Atlantic Savings and Loans Limited in Bayelsa (state government-owned) that became insolvent; Royal Savings and Loans Limited in Delta State that also closed shop; Amex Savings and Loans Limited in Lagos that failed to recapitalise; and Supreme Savings and Loans Limited also in Lagos that closed shop.

The CBN disclosed that eight finance companies voluntary liquidated; 13 failed to recapitalise; while one became insolvent. CBN had revoked the operating license of Skye Bank Plc with immediate effect. The Governor of the apex bank, Godwin Emefiele, disclosed this during a press briefing in Lagos.

On why the takeover of Skye Bank was inevitable, CBN in a released statement, said its noted that the result of its examinations and forensic audit of the bank revealed that the bank required urgent recapitalization, as it could no longer continue to live on borrowed times with indefinite liquidity support from the CBN. Shareholders were, however, unable to recapitalize it.

In consultation with the Nigerian Deposit Insurance Corporation (NDIC), it had decided to create a bridge bank Polaris Bank which the Asset Management Company of Nigeria (AMCON) will recapitalize. AMCON will then sell its stake in the bank.

Share this...

Leave a Reply

Your email address will not be published. Required fields are marked *