ANNOUNCED AS TEMPORARYNo
Bailout (capital injection or equity participation)
The Central Bank of Nigeria on 14 August 2009 announced a 400 billion naira (USD 2'560'000'000) bail out for 5 banks after sacking the CEOs and executive directors of the banks on 14 August 2009. The beneficiary banks of this bailout are the Oceanic Bank, Intercontinental Bank, Finbank, Union Bank and Afribank. Acting CEO's were immediately appointed and the Central Bank has guaranteed foreign loans and corresponding banking lines.
The primary grounds for the bailout is the financial instability of the banks that was primarily caused by the poor management practices of the CEOs and the rest of their management team. The banks are said to have accumulated bad debts of US$7.6 billion (1.14 trillion nairas). The excessively high level of non-performing loans was attributed to poor corporate governance practices, lack of adequate credit administration and absence or non-adherence to credit risk management practices. The five banks account for 40% of credit segment of the banking industry of Nigeria.
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.
⚑ Please report this page in case you detect an inaccuracy in its content.