A Review of Bank Liquidations and Consolidations in Nigerian Banks

Abstract

Since the emergence of banks in Nigeria in 1892, the Nigerian Banking sector has undergone a restructuring series. Before the 2006 banking consolidation exercise, many banks have gone under primarily due to poor management and inadequate financial reporting. The consolidation of banks in 2006 became necessary to forestall the sector's systemic collapse since many of the banks were distressed and unable to meet their customers' expectations. This qualitative review of the Nigerian banks focused on what transpired in the sector from 2006 to date. Archival and content analysis methods were used in the data collection and analysis process mainly because some banks have been liquidated while others have been merged or acquired by other banks. Findings revealed that some banks that survived the post-2006 consolidation exercise had been liquidated; some have merged with others while the banks are still operating as standalone. The CBN has introduced the bridge banks' concept to acquire and manage distressed banks pending new buyers' time. The amended code of corporate governance of 2016 has drastically improved the CBN's regulatory and monitoring activities. Accordingly, the CBN is better equipped. Lasting measures are in place to forestall any unanticipated disruptions in the Nigerian banking sector.