Failure of century merchant bank limited
Date
2006
Journal Title
Journal ISSN
Volume Title
Publisher
Nigeria Deposit Insurance Corporation (NDIC),
Abstract
Overview of Bank Performance; Early Warning Indicators; Core Reasons for Failure; Regulatory Interventions; Lessons Learnt; Summary and Conclusion
Description
Century Merchant Bank Limited, which commenced operations in 1988, had its license revoked in January 1998, indicating that the bank operated for a period of just 10years. The bank, right from its inception was flawed, with mismanagement and a lot of insider abuses.
Regulatory interventions in the bank, such as the imposition of holding actions, and assumption of control by CBN and NDIC during its ten years of operation could not assist the bank to survive as a going concern, beyond 1998. Given the Board’s lack of commitment, managerial incompetence and inability to recapitalize the bank, its failure was predictable. Hence, the doors of the bank were closed for business with effect from 16th January 1998 and it was eventually liquidated by the Nigeria Deposit Insurance Corporation (NDIC).