E-Financial
NDIC Lists Reasons for Collapse of Nigerian Banks
Nigerian Deposit Insurance Corporation (NDIC) has listed factors responsible for collapse banks in the country including; massive insider abuses by their owners; poor corporate governance arrangement; and inadequate risk management processes.
NDIC also identified weak board of directors’ structure, inadequate capital, weak regulatory and supervisory measures as well as economic and political factors as other reasons.
John Abiodun, assistant director, Insurance and Surveillance Department of the corporation, who spoke recently in Abuja, gave reasons why the NDIC has not been able to speedily resolve issues involving failed banks in the country.
Mr Abiodun identified some of these challenges to include delays in the revocation of the licenses of terminally distressed banks, depositor and creditor apathy, ignorance, delay in filing claims, and recovery of debts owed the failed banks.
Other concerns include the legal actions of owners of closed banks, protracted litigations, disposal of low-quality physical assets of the closed banks and provision of timely liquidity support.
Despite the challenges, Mr Abiodun said since its incorporation in 1988, the NDIC has carried out liquidation activities on 425 financial institutions in the country.
Details of the 425 liquidated banks during the period showed that 51 of them are Deposit Money Banks, 325 Micro Finance Banks and 51 Primary Mortgage Banks.
Abiodun said through efficient and diligent liquidation activities, the corporation has successfully paid in full the deposits of customers of 18 DMBs that were both insured and uninsured.
On Fortune International Bank, Triumph Bank and Peak Merchant Bank, the director said payments have been put on hold to depositors due to litigation challenging the revocation of their operating licence.
“Liquidation of a failed bank through revocation of license becomes the final bus stop when all efforts made by the shareholders and regulatory authorities do not yield the desired result.
“Once a bank’s license is revoked, NDIC takes over for liquidation,” he said.
Abiodun explained that before the corporation liquidates a bank, it usually takes time to look out for deficiencies, known as early warning signals that raises red flags.
Some of the early warning signals, he said, include aggressive growth and excessive competition for deposits, shareholder’s squabbles, frequent changes in management and ownership change in major business lines.
Other warning signs include failure to meet the minimum Capital Adequacy Ratio of 10 per cent, rising non-performing loans to total credit ratio of above five per cent, failure to meet the prevailing minimum liquidity ratio of 30 per cent, high total expense to total income ratio and high incidences of fraud.
Securities and Exchange Commission (SEC) has unveiled a technology adoption assessment survey for registered capital market operators as part of efforts to deepen innovation and efficiency in the Nigerian capital market.
In a circular, the SEC stated that the exercise was designed to evaluate the level of adoption of advanced technologies among CMOs operating within the Nigerian capital market.
According to the notice, “The following technology adoption survey is designed by the Commission to assess the adoption of advanced technologies among registered Capital Market Operators.”
The SEC directed all registered operators to log into the e-portal at using their current access credentials to complete the survey. The exercise will run for two weeks, from 5 to 20 May 2025.
Speaking recently on the role of innovation in the capital market, Emomotimi Agama, director-general of the SEC, urged stakeholders to embrace technology as a catalyst for growth, improved transparency, operational efficiency, and market resilience.
He noted that the SEC recognises the emergence of new financial products and services driven by technological advancements, and remains committed to adapting its regulatory framework to meet the evolving needs of the market.
According to him, the commission’s approach to innovation is anchored on three pillars: investor safety, market deepening, and problem-solving aimed at building a robust and efficient capital market ecosystem.
Agama also highlighted the commission’s Regulatory Incubation Programme, which allows fintech startups to operate within a controlled environment for one year while appropriate rules are developed to govern their activities.
He said the programme is part of the SEC’s broader strategy to support innovation while safeguarding market integrity and investor interests.
International Monetary Fund (IMF) ,has confirmed that Nigeria has fully repaid about US$3.4 billion loan it got in April 2020 under the Rapid Financing Instrument to help alleviate the impact of the COVID-19 pandemic and the sharp fall in oil prices.
IMF said the loan has been repaid as of April 30, 2025 in a statement issued in Abuja, Nigeria’s capital on Thursday.
However, IMF said Nigeria is still expected to honour some additional payments in forms of Special Drawing Rights charges hat will amount to US$30 million annually.
“In line with the IMF’s Articles of Agreements, these charges, levied at the SDR interest rate, which is updated at the beginning of each week, apply to the difference between Nigeria’s SDR holdings (SDR 3,164 million) (US$4.3 billion) and its cumulative SDR allocation (SDR 4,027 million) (US$5.5 billion)
“The net payment of the charges stops when Nigeria’s SDR holdings reach the cumulative allocation amount,” IMF said in the statement. Online fitness
Central Bank of Nigeria (CBN) has allotted N598.33 billion in Nigerian Treasury Bills across three different maturities, with the 365-day bill dominating the auction, accounting for 80 percent of total sales and subscriptions.
A total of N482.62 billion was sold in the 365-day tenor, highlighting strong investor interest in the longer-term security.
The 91-day bill saw the least demand, with subscriptions of N48.4 billion and actual sales amounting to just N38.4 billion. This latest issuance brings the total Treasury bill sales for the year to N7.248 trillion.
At the auction held on Wednesday, May 7, the CBN offered N550 billion across the three maturities, N50 billion for the 91-day, N100 billion for the 182-day, and N400 billion for the 364-day bills. Despite total subscriptions dipping to N1.08 trillion from N1.53 trillion recorded at the previous auction, the auction was still oversubscribed, reflecting continued high liquidity in the financial system.
This demand pressure kept yields largely stable. The 365-day bill saw a marginal increase in yield to 24.41 percent from 24.36 percent, while the 182-day and 91-day yields remained unchanged at 20.38 percent and 18.85 percent, respectively. Yields have maintained a consistent level over the last four auctions, indicating a stable interest rate environment despite fluctuations in demand.
As of May 6, 2025, system liquidity stood at N1.21 trillion. When combined with maturing bills worth N287.98 billion, the total available liquidity more than tripled the N550 billion offered at the auction, further underscoring the robust investor appetite for government securities amid high market liquidity.
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