NDIC Revokes licences of Afribank, Bank PHB and Spring Bank!



NDIC MD, Alh Umaru Ibrahim



The Nigeria Deposit Insurance Corporation (NDIC) on Friday (today) announced revocation of the operating licenses of Afribank Nigeria Plc, Spring Bank Plc and BankPHB on the excuse that they have not shown capacity and ability to recapitalise before the September 30 deadline.

Managing Director of NDIC, Alhaji Umaru Ibrahim told journalists in Lagos on Friday that the assets and liabilities of the three affected banks had been transferred to Bridge Banks effective August 5, 2011.

The Bridge Banks include MainStreet Bank Limited, Keystone Bank Limited and Enterprise Bank Limited. All these Fire Bbrigade approach, I thought Sanusi told us September 30? Now this....

Under the new arrangement, MainStreet Bank Limited takes over the assets and liabilities of Afribank; Keystone Bank Limited assumes the assets and liabilities of Bank PHB while Enterprise Bank Limited takes over that of Spring Bank.

Ibrahim explained that the Bridge Banks are being run by the NDIC as growing concern, adding that the managements of the affected banks appointed by the CBN in 2009 have ceased to be the working for the apex bank and the respective banks.

He said that the corporation by the provision of the Bridge Bank option in law to resolve the problem in the banking sector, stating that option was a veritable tool to enhancing depositors’ protection.

“This move became necessary to restore the confidence of the stakeholders in the banking industry. The banks would still be run as a going concern by the NDIC through the Bridge Banks mechanism. Meanwhile the CBN appointed management cease to be employers of CBN but are now under the NDIC,” he said.

Umaru said the choice of the Bridge Bank option was arrived at in order to avoid the liquidation which would have had dire consequences for depositors and undermine public confidence in the banking system, stressing that despite the change in nomenclature, depositors would soon have access to their deposits and could transact business as usual.

He added that this will promote confidence by ensuring seamless continuity of banking operations,

The NDIC boss further said that the corporation will keep operating the Bridge Banks until such a time it would engage the AMCON.

The CBN has given a tacit approval to the action, stressing that the action would ensure that public confidence in the banking sector is not eroded and that depositors’ funds are safe.

A statement issued by the apex bank tagged “ Re resolution of recapitalization through bridge banks” saying “The CBN is aware of, and supports, the decision of NDIC, to exercise its statutory powers under the NDIC Act.”

The apex bank noted that the new development would ensure seamless business continuity, adding that the Bridge Banks would meet obligations to depositors and lender-creditors as they arise.

It assured that it would grant all waivers, forbearances and exemptions necessary for their operations. Consequently, it has extended the interbank guarantee to December 31.

The three banks are among the those rescued by the CBN in 2009 when their managements were sacked, while the apex bank injected N620 billion. However, four of the banks- Intercontinental Bank, Union Bank, Finbank and Oceanic Bank had made progress in their recapitalisation plans, having gotten core investors.