NDIC: How we saved 12,667 banks’ jobs, depositors’ N1trn

The adoption of the Bridge Banks option by the Nigeria Deposit Insurance Corporation (NDIC) has prevented systemic crisis and secured N1.021 trillion deposits which ensured that depositors access their funds and financial services.

Mr. Bello Hassan, Managing Director of the NDIC, disclosed this on Saturday at the 2021 Editors Forum with the theme: “Enduring Extreme Disruptions: Resilience & Reinvention for Banking System Stability & Deposit Insurance” in Lagos.

He said that the several failure resolution initiatives such as Open Bank Assistance (OBA), Purchase & Assumption (P&A) and Mergers & Acquisition (M&A) had been adopted in resolving distress in various banks from 1989 culminating in the novel Bridge Bank option.

A bridge bank is an institution created by a national regulator or central bank to operate a failed bank until a buyer can be found.

Hassan explained that the option has so far secured N1.021 trillion deposits which ensured that depositors had continued access to their funds and financial services.

“The implementation of the Bridge Bank option also saved over 12,667 jobs while over 877 branch network and services of the affected banks were maintained.

“The corporation’s accomplishment in the payment of guaranteed sums and liquidation dividends speaks volumes of its commitment to the discharge of its unique mandate.

“NDIC had paid a cumulative sum of ₦8.268 billion to 443,946 insured depositors and ₦100.080 billion to uninsured depositors of deposit money banks in-liquidation as at 30^th September, 2021.

“It also paid N3.413 billion to 90,945 insured depositors of microfinance banks and ₦1.218 million to uninsured depositors.

“In the same vein, cumulative insured amount paid to 1,553 depositors of closed primary mortgage banks as at 30^th September, 2021 stood at N110.15 million while ₦7.965 million was paid as uninsured deposits.

“Most importantly, the payment of N1.274 billion to 991 creditors and ₦4.886 billion to 965 shareholders of banks in-liquidation as at 30^th September 2021 underscored the Corporation’s success story in bank liquidation.

“What this implies is that the Corporation had realised enough assets to pay all the insured and uninsured depositors of the banks that present themselves for payment. Currently, 19 out of the 49 DMBs in-liquidation fall into this category,” he said.