Two of Nigeria’s most prominent bank chief executives are to be forced to stand down under new rules introduced by the Central Bank of Nigeria (CBN) as part of the governor’s ongoing tussle with some of the country’s most powerful tycoons.

Lamido Sanusi, who took over as CBN Governor in June, has already rocked the financial sector in Africa’s second largest economy, dismissing the executives of eight banks during a debt crisis brought on by reckless lending. The Central Bank of Nigeria (CBN) bailed out stricken banks to the tune of $4 billion.

In the latest move, the country’s 24 banks have been instructed to place a 10-year limit on the tenures of chief executives. “All CEOs who would have served for 10 years by July 31, 2010 shall cease to function in that capacity and shall hand over to their successors,” the CBN said.

The purpose of the new rules was to address “corporate governance issues”, the CBN said.

Three chief executives would be affected, including the heavyweights who run two of the continent’s largest banks, people familiar with the situation said.

One is Tony Elumelu, who emerged as chief executive at United Bank for Africa (UBA) following a power struggle that followed its 2005 merger with Standard Trust Bank, which he had run since 1997. UBA’s board has just appointed Phillips Oduoza as the MD/CEO designate to replace Tony Elumelu.

UBA says it has assets of more than $19 billion, seven million customers in 14 African countries, and offices in New York, Paris and London. In 2008, US regulators fined UBA $15 million for failing to implement an adequate anti-money laundering program. The bank has since appointed new risk managers. Read the rest of this entry »

Tags: Banking, CBN, Central Bank of Nigeria, Godwin Emefiele, Jim Ovia, Lamido Sanusi, Nigeria, Phillips Oduoza, Standard Trust Bank, Tony Elumelu, UBA, United Bank for Africa, Zenith Bank