4 Oct 2009

More banks bailed out in Nigeria

6:56 am on 4 October 2009

The central bank of Nigeria has bailed out four more banks.

The rescued banks - Equitorial Trust, Bank PHB, Spring Bank and Wema Bank - were given 200 billion naira ($US1.37 billion) in loans and support on Friday. Their chief executives were sacked.

After an audit of their books, the central bank said they were "adjudged to be in a grave situation".

The BBC reports another bank, Unity, does not have sufficient capital but has enough to avoid being in a grave situation.

Central bank governor Lamido Sanusi took office in June and has now completed an examination of all of 24 banks in the country.

In August, Mr Sanusi injected a total of 400 billion naira into five banks - Afribank, Intercontinental Bank, Finbank, Oceanic Bank and Union Bank - after they were found to have very low cash reserves and fired their senior management.

They had run up bad loans totalling a collective 1.14 trillion naira.

Four chief executives have now appeared in court charged with fraud.

The Economic and Financial Crimes Commission says nearly $US300 million in bad debt has been recovered, but billions are still outstanding.