The CBN Governor announced on Friday, August 14th that the heads of Intercontinental, Oceanic, Finbank, Afribank, and Union Banks had been replaced. Those replaced are Erastus Akingbola of Intercontinental Bank Plc, Cecilia Ibru of Oceanic Bank Plc, Bart Ebong of Union Bank Plc, Okey Nwosu of FinBank Plc and Sebastian Adigwe of Afribank Plc. And the CBN will be injecting N400billion into these banks. Here is the report from Bloomberg:

Nigeria’s central bank Governor Lamido Sanusi fired the chief executive officers of five banks over a mounting debt crisis in the industry and said he would inject 400 billion naira ($2.6 billion) into the companies.

“I am satisfied that these five institutions are in a grave situation and their management have acted in a manner detrimental to the interest of their depositors and creditors,” Sanusi said.

Bad Debts
Those dismissed are Erastus Akingbola of Intercontinental Bank Plc, Cecilia Ibru of Oceanic Bank Plc, Bart Ebong of Union Bank Plc, Okey Nwosu of FinBank Plc and Sebastian Adigwe of Afribank Plc, Sanusi said.

Four of the five banks were permanently locked in as borrowers from the central bank, Sanusi said. The fifth was a frequent borrower, he added, without giving names.
The banks had pushed up interest rates on the interbank market and were the principle reason why the central bank guaranteed loans between lenders on July 7, Sanusi said.

“Without that guarantee, most of our banks would not have been able to borrow in the interbank market and would probably have collapsed,” he said.
The bad debts in Nigeria’s banking system compare with deposits of 5.06 trillion naira in July, down from 5.16 trillion in May, according to the Web site of the central bank.

Sanusi made the following appointments: John Aboh becomes CEO of Oceanic, Mahmud Alabi will take the helm at Intercontinental, Nebolisah Arah will head Afribank, Suzanne Iroche is the new chief executive officer of Finbank and Funke Osibodu takes over at Union Bank.

No Surprise “Frankly, I’m not surprised,” said Rose Umoren, head of the Abuja-based research company, Global Money Ltd. “I don’t think it’s limited to just five banks. If the governor wants to have credibility, he needs to look at the assets of every Nigerian bank.”

The 400 billion naira would be injected into the five banks “with immediate effect,” Sanusi said. The money will be repaid from the “proceeds of capitalization in the near future,” he added, without giving details.