We will be looking at failed Nigerian banks in the past and about them in this article.
Abacus Merchant Bank Ltd
The bank experienced corporate governance challenges from inception. The Board Members should have discharged their fiduciary responsibilities. The bank was illiquid and insolvent and could not be resuscitated by its shareholders.
Bad credit, insider abuse, mistrust amongst directors, non-publication of financial statements, capital inadequacy, and many more were the reasons for the bank's failure. CBN revoked its license on Jan 16, 1998, and put it in liquidation by NDIC.
Allied Bank of Nigeria Plc
The primary factor that induced other factors that led to the bank's failure was the acquisition of majority equity interest by the Federal Government, accompanied by the take-over of the board and Management control.
The business focus was value-creation for its shareholders and profitmaking, while the government goal was developmental. The government intervention was driven by the desire to take over the economy's commanding heights.
The conflicting goals of the two shareholders induced the loss of interest. Its liquidation was on Jan 16, 1998
Allstates Trust Bank PLC
The bank went into liquidation because of weak credit administration, utilization of the bank's funds for property development by associated companies, Willful violation of laws, rules, and regulations, and failure to take proactive measures to manage its liquidity crisis. Liquidation was on Jan 16, 1998
Alpha Merchant Bank PLC
Weak Corporate Governance, Management Ineptitude, Financial Engineering. Alpha Merchant Bank graphically illustrates that any bank subjected to reckless mismanagement is bound to fail.
It also provides useful lessons for various stakeholders, including policy-makers, regulators, boards of directors, and bank management. Its liquidation was on Sept 08, 1994
Assurance Bank of Nigeria PLC
The Board abdicated its responsibility to provide focused leadership and strategic direction. The antecedent of one of the Directors appointed did not suggest that he was a "fit and proper" person to be saddled with the turnaround of a bank like Assurance Bank, Willful violation of laws, rules, and regulations, etc.
Its liquidation was on Jan 16, 2006
Century Merchant Bank LTD
Several factors contributed to the bank's failure, including Management of Risk Assets, Run on the Bank, Existence of Multiple Litigations, Attitude of the Board, Prolonged Loss-making, and Insider Abuse.
Its liquidation was on Jan 16, 1998
Group Merchant Bank LTD
The failure of GMB is a classical case of principal shareholders that promoted and owned banks through dubious means and for the sole purpose of using such banks to perpetrate economic and financial crimes.
The main target was to use forex transactions for rent-seeking purposes and to enrich themselves with ill-gotten wealth. The license was revoked on Jan 16, 1998, and NDIC closed and put GMB in liquidation through a pay-out option.
Ivory Merchant Bank LTD
The shareholders and board needed to gain the technical competence to superintend over a banking institution. The directors failed to provide strategic direction and formulate policies to guide the bank's operations.
Management ineptitude and fraudulent practices set the bank on the journey to its failure, absence of internal control, etc. Its liquidation was on Dec 22, 2000.
Merchant Bank Of Africa LTD
Fraudulent and Self-serving Practices among Members of the Board, Ineffective Management Information System, Poor Risk Management Practices, Sloppiness of External Monitoring/Supervision, etc. Its liquidation was on Jan 16, 1998
Pan African Bank LTD
In the specific case of PAB, a series of Bank Examination Reports issued between 1988 and 1996 offer a good basis for the identification of the key categories of actors whose activities generated changes in many critical variables, which, in turn, served as the proximate triggers for the bank's lingering distress and ultimate failure.
Each of these is identified; its activities and the trend of changes in each relevant variable are analyzed. The bank went into liquidation on Jan 16, 1998.
Top 10 Successful Banks In Nigeria
If you are looking for successful banks to bank with and get some tips for running your financial institution, check these out.
The following are successful banks in Nigeria that you can bank with
- Access Bank
- Zenith Bank
- Guaranty Trust Bank
- Fidelity Bank
- First Bank of Nigeria
- United Bank of Africa
- Stanbic IBTC
- Heritage Bank
- Union Bank
- Wema Bank
These Nigeria failed banks in the past did not go into liquidation because they wanted to but due to poor management, cooperation, and many others, as we have seen in the article above.
If you are looking at starting up your own financial institution, you should learn from the mistakes of these failed banks so you can avoid them and improve yours.
