Or of Nigeria’s troubled banks- Finbank on Friday has declared a 94.35 billion naira ($630 mln) pre-tax loss for the 11 months to September, hit by provisions and exceptional items totalling more than 120 billion Finbank is changing its financial year to the calendar year in line with a central bank directive to establish a uniform reporting period across the banking sector, meaning year-ago comparisons were not immediately available.
Nigerian banks rescued in a $4 billion bailout were found to be in a worse financial state than initially concluded in a government audit, the central bank said on Friday.
The central bank has injected 600 billion naira ($4 billion) into the banking system since mid-August and replaced top executives after a special audit found nine of Nigeria’s 24 banks were so weakly capitalised that they posed a system risk.
“Following more detailed investigations, the new management of these banks found the situation in a number of the affected banks to be worse than had been originally thought,” said Mohammed Abdullahi, central bank spokesman.
Newly appointed bank executives found the deeper losses when preparing their third quarter earning results.
“The third quarter earnings announcements for a number of banks have included a level of provisions that have led to reported losses, reflecting the true position of the lending portfolios.”
“As a result of these findings, the banks had to make provisions over and above the CBN’s initial recommendations.”
He did not specify which banks were affected or how much deeper the losses were, but expressed confidence that the “worst was now behind us.”
The central bank injected 400 billion naira into Afribank , Finbank, Intercontinental Bank, Oceanic Bank and Union Bank on Aug. 14 and sacked senior executives its auditors found lax governance had left them dangerously undercapitalised.
Less than two months later it said it was providing 200 billion naira to four more banks — Bank PHB, Equitorial Trust Bank, Spring Bank and Wema Bank — also judged to be facing a grave liquidity risk.
“The Tier 2 capital injected in the banks in August and October to help bolster their capital positions will remain in place,” Abdullahi said.
“(The central bank) will introduce additional liquidity as required to ensure that the banking system continues to function normally.”
The regulator wants to establish an Asset Management Company (AMC) to soak up as much as 400 billion naira in bad bank loans