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Bank Phb Afribank And Springbank Nationalised - Business - Nairaland

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Bank Phb Afribank And Springbank Nationalised by superstar1(m): 8:12pm On Aug 05, 2011
ABUJA, Nigeria — Nigerian financial regulators nationalized three banks Friday night in the course of an ever-widening probe of corruption allegations and mismanagement of fiscal institutions in the oil-rich nation.

Authorities took over Afribank PLC, Bank PHB and Spring Bank PLC after markets closed in Africa’s most populous nation, quickly renaming the institutions Mainstreet Bank Ltd., Keystone Bank Ltd. and Enterprise Bank Ltd., the country’s finance ministry said.The move comes two years after the nation’s central bank injected $2.55 billion into the troubled banking industry and some former CEOs now face allegations of stealing depositors’ money.

This “represents an important milestone in the process of stabilizing 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,” Finance Minister Yerima Ngama said in a statement.

Nigeria’s central bank also issued a statement promising depositors their money would be safe and that interbank obligations would be covered through Dec. 31.

A top exporter of crude oil to the U.S., Nigeria is also considered to be West Africa’s banking center.

But central banker Sanusi Lamido Sanusi fired five top banking CEOs amid the 2009 bailout, blaming the crisis on poor decisions that led the firms into “technical insolvency.” Analysts later said the crisis grew out of lax regulation of financial institutions in Nigeria, leaving ample room for banks to cook their books.

The financial crisis ultimately affected nine of Nigeria’s 24 banks.

Anti-corruption officials later arrested and charged some former CEOs with stealing depositors’ funds, including former Afribank CEO Sebastian Adigwe. Former Bank PHB PLC chief Francis Atuche also faces fraud charges.

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