FOLLOWING the outcome of the ongoing audit by the Central Bank of Nigeria (CBN), of the remaining 14 banks in the country, the apex bank yesterday officially announced the sack of three bank Managing Directors and their Executive Directors having found the banks wanting in the area of liquidity, capital adequacy and corporate governance. The affected bank chiefs are Mr Francis Atuche of Bank PHB Plc, Mr Ike Oraekwuotu of Equitorial Trust Bank Plc and Mr Charles Ojo of Spring Bank Plc. To replace them are, Mr. Cyril Chukwumah for Bank PHB Plc, Mr. G. O. Folayan for Equitorial Trust Bank Plc and Mrs. Sola Ayodele for Spring Bank Plc. Similarly, the apex bank ordered the removal of all non-executive directors of Spring Bank Plc, as well as the removal of Dr. Mike Adenuga, CON, as a Non-Executive Director of Equitorial Trust Bank Plc. It stated that new executive directors would be appointed for the banks in due course. As for Wema Bank Plc and Unity Bank Plc, the CBN ordered the boards of the two banks to recapitalise by June 30 next year, noting that Wema Bank Plc came under new ownership and management in June this year which took over a bank already in a grave situation and should not be held responsible for the present condition of the bank. Unity Bank Plc was adjudged to have insufficient capital for its current level of operations but was adjudged to have a healthy liquidity position with no indication of poor corporate governance practices. Besides, President Umaru Musa Yar'Adua, has directed the Minister of Finance and the Central Bank Governor to liaise with the Attorney General of the Federation, the National Assembly and other relevant stakeholders with a view to fast-tracking the process of establishing an Asset Management Company. "The formation of this company should facilitate an improvement in banking sector liquidity, protection of the earnings of banks from further erosion and a reduction of the debt overhang on the capital market and its participants. This should provide a much-needed fillip for the revival of the Nigerian Capital Market", the CBN said. Although the loan portfolio of the banks was not stated, the apex bank has injected N200 billion as liquidity support and long-term loans for the four banks adjudged to be in a grave situation. In a press statement made available to The Guardian in Lagos yesterday by the CBN's Head of Corporate Affairs, Mr Muhammed Abdullahi, the apex bank, after a review of the findings of the special examination report in respect of the remaining 14 banks, found nine banks to have adequate capital and liquidity to support the level of their current operations and future growth, while the 10th bank, Unity Bank, was adjudged to have insufficient capital but not in grave situation because it has healthy liquidity position. Furthermore, the remaining four banks, Bank PHB Plc, Equitorial Trust Bank Plc, Spring Bank Plc and Wema Bank Plc, were found to be in a bad situation. The nine banks found to have adequate capital and liquidity include Access Bank Plc, Citibank Nigeria Limited, Ecobank Nigeria Plc, Fidelity Bank Plc, Skye Bank Plc, Stanbic IBTC Bank Plc, Standard Chartered Bank Limited and Zenith bank Plc, all in the order of arrangement by CBN. The apex bank however said that it would assist the five banks with insufficient capital in their loan recovery efforts, just as it did in the case of the previous five in its first audit. It had embarked on a special audit of all the 24 banks operating in the country. With the result of the first audit announced on August 14, this year, the phenomenal rejig announced by the CBN Governor Mr. Sanusi Lamido Sanusi, affected the chief executive officers of Intercontinental Bank Plc, Mr. Erastus Akingbola; Sebastine Adigwe of AfriBank Plc; Okey Nwosu of Finbank Plc; Mrs Cecilia Ibru of Oceanic Bank Plc and Barth Ebong of Union Bank Plc. Sanusi had replaced them with John Aboh for Oceanic Bank Plc, Mahmud Alabi (Intercontinental Bank), Nebolisa Arah (Afribank), Suzanne Iroche (Finbank) while Funke Osibodu took over at Union Bank Plc. Sanusi, in the case of the first five banks, had explained that the total loan portfolio of the five banks was N2.9 trillion; margin loans amounted to N456.28 billion and exposure to oil and gas was N487.02 billion while aggregate non-performing loans stood at N1.2 trillion, representing 40.81 per cent. As for the affected four banks, the statement reads: "After a careful consideration of the matter, and in exercise of the powers conferred on him by Sections 33 and 35 of the Banks and Other Financial Institutions Act 2004, the Governor of the CBN, by order in writing, has taken a number of measures aimed at arresting the grave situation of these four banks." Reiterating its commitment to assisting the affected banks in their loan recovery drive, Sanusi said that the five banks as at September 25, this year, had recovered more than N110 billion of previously non-performing loans. With the conclusion of the banks' audit exercise, CBN explained that its ongoing action will "focus on building capacity within the regulatory regime; fast-tracking the implementation of risk-based consolidated and cross border supervision frameworks; easing the flow of credit, particularly to the real sector of the economy; improving governance structures and practices in the financial services sector; and improving confidence in the economy in general." To however forestall confidence crisis in the nation's capital market following the decision of the CBN, the Director General of the Nigerian Stock Exchange (NSE), Professor (Mrs) Ndi Okereke-Onyuike announced that only two of the three affected banks are quoted on the Exchange. The NSE boss who was accompanied by the Assistant D. G. of the NSE, Dr. Musa Lance Elakama and General Manager, Information Technology, Mr. Kere Okafor allayed the fears of investors and market operators on any negative effect of the decision on trading in the market. At the close of transactions on the floor of the Exchange yesterday, a total of 294,962 shares of Bank PHB Plc worth N982,223 changed hands as its share price closed at N3.33 per share, while that of Spring Bank Plc closed at N2.92 per share after it exchanged 63,390 shares worth N185,098. Unity Bank Plc exchanged 921,989 valued at NN940,419 to close at N1.02 per share. Source: The Guardian News, Nigria