We saved N809.4bn through bank nationalisation 'NDIC

A total of N809.4bn was secured following the August 5, 2011 nationalisation of three distressed Deposit Money Banks, the Nigeria Insurance Deposit Corporation has said.According to the corporation, as at the end of July 2011, depositors of 11 DMBs liquidated in 2006 were paid a total sum of N70.046bn.The Managing Director/Chief Executive Officer of the corportaion, Mr. Umaru Ibrahim, said the establishment of the three banks was in line with the provisions of the NDIC Act.He noted that after due consultation with the Central Bank of Nigeria and the Federal Ministry of Finance, the three bridge banks were established for the transfer of the assets and liabilities of the troubled Afribank Plc, Bank PHB Plc and Spring Bank Plc.The three banks were Mainstreet Bank Limited, Keystone Bank Limited and Enterprise Bank Limited respectively, he said, while addressing guests at the Lagos International Trade Fair on Saturday.Among other benefits, the bridge banks mechanism not only safeguarded N809.4bn ($5.5bn), it also protected jobs in the affected banks. In addition, the three banks were acquired by the Asset Management Corporation on the same day with an infusion of N678.8bn ($4.526bn).Ibrahim, who was represented by Head Communication and Public Affairs, NDIC, Mr. Hadi Birchi, stressed that the CBN and NDIC conducted a special examination of 24 DMBs in August 2009, which revealed that 10 of the banks were in grave condition.He noted that findings from the examination led to the removal of eight Chief Executive Officers of the distressed banks by the CBN, which also injected the sum of N620bn as tier-two capital in the affected banks.While five of the banks, had either found willing merger partners or acquirers and were making serious efforts to improve their financial condition through recapitalisation, the other three, namely Afribank Plc, Bank PHB Plc and Spring Bank Plc were apparently not making much effort that might yield meaningful results by the end of September 30, 2011 deadline, he said.The NDIC boss noted that as at July 2011, it paid a cumulative sum of N3.304bn out of N5.24bn in the 35 banks in-liquidation (pre-consolidation), representing 63 per cent of the total deposit liabilities.He said depositors and other claimants of the affected banks which were closed during the same period were paid N6.12bn out N16.85bn, representing 37 per cent.
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