Nigeria’s central bank revokes licences of 182 financial institutions

Nigeria’s banking regulator, Central Bank of Nigeria (CBN) has revoked the licences of 182 struggling financial institutions in the country. This was made known through a notice published on the bank’s official website on Wednesday 26 September.

Of the 182 financial institutions, 154 are microfinance banks, 22 are finance companies while the remaining six are mortgage banks. According to the Central bank, 62 of the affected Microfinance Banks have already closed shop, 73 were insolvent and 11 were terminally distressed. The remaining five voluntarily filed for liquidation.

Regarding the finance companies, the majority (13) were unable to recapitalise. Eight others were on voluntary liquidation and the remaining one was insolvent.

On 21 September, the licence of Skye Bank Plc. was revoked due to the bank’s inability to stabilize after CBN attempted to save it severally. The CBN afterwards created Polaris Bank to be Skye Bank’s operator until it can find a buyer for its operations.

The Central Bank noted that the result of its examinations and forensic audit of the bank revealed that the bank required urgent recapitalization, as it could no longer continue to live on borrowed times with indefinite liquidity support from the CBN.

This is not the first time there has been a massive revocation of licences. In 2012 CBN began a clamp down on Primary Mortgage Banks (PMBs) that deviated from the mortgage businesses they were licensed for. 25 Primary Mortgage Banks were affected and their licences were revoked. Similarly, licences of 224 Microfinance banks were revoked in 2010.