Despite the markets initial negative reaction to the news, most commentators seem to view the move by the CBN as a positive step.

Based on this precedent, the authorities would likely be prepared to inject further capital into other institutions to stabilize them and safeguard depositors if necessary. Given this, the degree of market nervousness – as reflected in volatility in the US dollar/naira exchange rate – appears to be overdone, in our view,” she argues.

In a dramatic move, the Governor of the Central Bank of Nigeria, Lamido Sanusi, on Friday sacked the CEOs of five banks and announced a N400 billion bailout to the respective banks.

Since the collapse or near collapse of many of the world’s foremost financial institutions last year, there has been much talk about the health of Nigeria’s banking sector. The general belief was that although the sector couldn’t distance itself from happenings in the rest of the world, everything was under control with no need for any government intervention. Still there has always been speculation that everything was not right.

New Central Bank of Nigeria (CBN) Governor, Sanusi Lamido Sanusi, on Friday however ended the rumors when he announced a N400 billion (US$2.5 billion) bailout for five of the country’s banks – Oceanic Bank, Intercontinental Bank, AfriBank, FinBank (First Inland Bank), and Union Bank. The CEOs and Executive Directors of the five banks were also suspended and immediately replaced. Read the rest of this entry »

Tags: Afribank, Banking, CBN, Central Bank of Nigeria, FinBank, First Bank of Nigeria, First Inland Bank, Intercontinental Bank, Lamido Sanusi, Nigeria, Nigerian Stock Exchange, NSE, Oceanic Bank, Razia Khan, Standard Chartered, Union Bank