The Nigerian banking industry has been subject to a significant number of bank closures over the past three decades, with approximately 46 commercial and merchant banks having closed their doors for various reasons. These closures have had a profound impact on the country’s financial landscape and have raised questions about the stability and sustainability of the banking sector.
According to available data, the Central Bank of Nigeria has been the primary regulator responsible for revoking the licenses of banks that have failed to meet the required financial and operational standards. Between 1994 and 2006, a total of 45 banks had their licenses revoked by the CBN, leading to the takeover of two commercial banks by United Bank of Africa and Ecobank.
The most recent bank closure occurred in 2018 when Skye Bank had its operating license revoked by the CBN. In response, Polaris Bank was authorized to take over the failed bank. The process of winding up the closed banks was handled by the Nigeria Deposit Insurance Corporation (NDIC), which was appointed as the liquidator by the Federal High Court.
The closure of these banks has not only impacted the financial sector but also affected the wider economy, with many customers losing their savings and investments. However, recent reports suggest that customers of 20 of the failed banks have been asked to come forward to receive their money, providing some relief for those who have been impacted by the bank closures.
The ongoing issue of bank closures in Nigeria highlights the need for greater regulatory oversight and financial stability in the sector. As the country continues to develop and expand its financial services industry, it is essential that measures are put in place to ensure the stability and security of the banking sector, thereby safeguarding the interests of customers and investors alike.
- Abacus Merchant Bank Ltd – Jan. 16, 1998
- ABC Merchant Bank Ltd – Jan. 16, 1998
- African Express Bank Ltd – Jan. 16, 2006
- Allied Bank of Nigeria Plc – Jan. 16, 1998
- Allstates Trust Bank Plc – Jan. 16, 1998
- Alpha Merchant Bank Plc – Sept. 08, 1994
- Amicable Bank of Nigeria Plc – Jan. 16, 1998
- Assurance Bank of Nigeria Plc – Jan. 16, 2006
- Century Merchant Bank Ltd. – Jan. 16, 1998
- City Express Bank Plc – Jan. 16, 2006
- Commerce Bank Plc – Jan. 16, 1998
- Commercial Trust Bank Ltd – Jan. 16, 1998
- Continental Merchant Bank Plc – Jan. 16, 1998
- Coop. & Commerce Bank Plc – Jan. 16, 1998
- Credite Bank Nig. Ltd – Jan. 16, 1998
- Crown Merchant Bank Ltd. – Jan. 16, 1998
- Financial Merchant Bank Ltd. – Jan. 21, 1994
- Great Merchant Bank Ltd. – Jan. 16, 1998
- Group Merchant Bank Ltd. – Jan. 16, 1998
- Gulf Bank Ltd – Jan. 16, 2006
- Hallmark Bank Plc – Jan. 16, 2006
- Highland Bank of Nig Plc – Jan. 16, 1998
- ICON Ltd. (Merchant Bankers) – Jan. 16, 1998
- Ivory Merchant Bank Ltd. – Dec. 22, 2000
- Kapital Merchant Bank Ltd. – Jan. 21, 1994
- Lead Bank Plc – Jan. 16, 2006
- Lobi Bank of Nig. Ltd. – Jan. 16, 1998
- Mercantile Bank of Nig. Plc. – Jan. 16, 1998
- Merchant Bank of Africa Ltd. – Jan. 16, 1998
- Metropolitan Bank Ltd. – Jan. 16, 2006
- Nigeria Merchant Bank Ltd. – Jan. 16, 1998
- North-South Bank Nig. Plc. – Jan. 16, 1998
- Pan African Bank Ltd. – Jan. 16, 1998
- Pinacle Commercial Bank Ltd. – Jan. 16, 1998
- Premier Commercial Bank Ltd – Dec. 22, 2000
- Prime Merchant Bank Ltd. – Jan. 16, 1998
- Progress Bank Ltd. – Jan. 16, 1998
- Republic Bank Ltd – June 29, 1995
- Rims Merchant Bank Ltd. – Dec. 22, 2000
- Royal Merchant Bank Ltd. – Jan. 16, 1998
- Trade Bank Plc – Jan. 16, 2006
- United Commercial Bank Ltd. – Sept. 8, 1994
- Victory Merchant Bank Ltd. – Jan. 16, 1998
- Eagle Bank Plc- Jan. 16, 2006
- Liberty Bank Plc.- Jan. 16, 2006
Two were taken over by UBA and Ecobank
As the Nigerian banking sector experienced a spate of closures over the past few decades, some financial institutions have been able to weather the storm by taking over failed banks. United Bank of Africa (UBA) and Ecobank are two such examples of banks that have successfully acquired other financial institutions.
Ecobank, for instance, was able to take over All States Trust Bank, as revealed by checks conducted by Legit.ng. This acquisition included 65 branches that had previously been owned by All States Trust Bank, as well as over 32,000 depositors who subsequently became part of Ecobank’s customer base.
Similarly, UBA Plc was able to emerge as the successful bidder for Trade Bank Ltd. This acquisition gave UBA control over Trade Bank’s assets, including its customer base, loans, and investments. By taking over these failed banks, UBA and Ecobank were able to expand their market presence and strengthen their position within the banking industry.
However, while such acquisitions can provide opportunities for growth and expansion, they also come with certain challenges. For instance, the integration of different banking systems and processes can be complex and time-consuming, requiring significant investment in technology and personnel. Additionally, the success of such acquisitions depends on the ability of the acquiring bank to effectively manage and integrate the new customer base and assets, and to maintain the trust and confidence of its existing customers.
In summary, the acquisition of failed banks by UBA and Ecobank represents a successful strategy for navigating the turbulent Nigerian banking sector. While such acquisitions may present challenges, they also provide opportunities for growth and expansion, enabling these banks to consolidate their positions and cement their standing within the industry.