Lagos — The Central Bank of Nigeria (CBN) is currently considering the injection of more funds into some of the five undercapitalised banks whose managing directors and executive directors were removed last Friday.

The CEOs - Barth Ebong of Union Bank, Cecilia Ibru of Oceanic Bank and Okey Nwosu of Finbank, Sebastian Adigwe of Afribank and Erastus Akingbola of Intercontinental Bank - were fired by the banking watchdog on the ground of being "principal causes of financial instability in their banks and for acting in a manner that was detrimental to the interest of their depositors and creditors".

The CBN appointed new CEOs to head management teams that will include executive directors and chief financial officers to be appointed by the regulator, pending when the banks are resuscitated and handed over to new managements.

In a bid to address the banks' liquidity problems, the banking watchdog had last Friday injected a total of N420 billion into the banks but THISDAY learnt last night that the package may soon hit N1 trillion to put the banks on a sound footing and restore full confidence in them.

THISDAY gathered the initial funds were not sufficient to meet the needs of some of the troubled banks whose new managing directors have already intimated the CBN Governor, Mr. Sanusi Lamido Sanusi, of the need to pump in more funds because of what they met on ground.

Last Saturday, according to sources, the new helmsmen of these banks met with Sanusi in Lagos and tabled their respective challenges and financial demands, which the latter is currently considering.

There was a case of a bank whose share of the bailout package disappeared immediately it hit the bank's account with CBN.

The bank, according to information, was already indebted to the CBN to the tune of N60 billion and other fellow banks to the tune of N70 billion through the inter-bank market - the window where banks borrow funds from one another to meet their immediate cash needs. Consequently, the bank's account was thrown into a negative of N30 billion.

The new managing director of the bank was said to have told Sanusi that given this development, coupled with the anticipated panic withdrawal and the funds that would be required for operations, there would obviously be a need for more funds to be injected into the bank.

Meanwhile, the Nigerian Stock Exchange (NSE) yesterday placed a full suspension on the shares of the five banks.

With the full suspension, there will neither be movements nor trading in the shares of the affected banks. It is, however, not a punitive measure but a tool employed by an exchange to prevent share price manipulation or outright dumping.

Also, the NSE has said that its second vice-president and former Intercontinental Bank chief, Dr. Erastus Akingbola, remains a member of its board until there is a security report indicting him of any crime.

Director-General of the NSE, Prof. Ndi Okereke-Onyiuke, who made this known in a chat with newsmen in Lagos, said the decision to fully suspend the shares of the banks indefinitely was borne out of a joint agreement by the CBN, the Securities and Exchange Commission (SEC) and the NSE to forestall investors or even the sacked bank chiefs from dumping their holdings in the banks.

Okereke-Onyiuke, however, said that the decision to suspend trading in the banks' shares would be reviewed after two weeks.

On Akingbola, the DG NSE said that he was elected to the board of the exchange on a personal capacity as the chairman of Lagos/Ibadan zonal branch of the exchange and not in the capacity as the managing director of any institution.

She also said that until there is an established criminal report against him, he will be accorded the full privilege of a member of the council of the stock market.

Okereke-Onyiuke, while debunking claims that the CBN action was inimical to growth of the economy, said in a way the injected N400 billion into the banks would, beside having a positive impact on the capital market, "is also in the best interest of investors in those banks as it will check the collapse of the banks".

Explaining the injected funds to the banks, the NSE DG said the money was meant for tier-two capital of the banks, to assist them in their operations and not for shareholders of the banks to share as dividends.

"It is not for shareholders to distribute. It is to shore up the porous nature of the banks, so that when a cheque is written by a customer it will be honoured," she said.

According to SEC, which gave the directive to place the suspension on the shares, the new managements of the banks are expected to give the market a situation report at the expiry of the two weeks.

SEC's Head of Media, Mr. Lanre Oloyi, said in a statement yesterday that the action of the CBN would strengthen the affected banks, the financial sector and invariably benefit shareholders of the banks.

Across the country, there were mixed reactions from depositors to the scenario in the banking sector. THISDAY reporters who monitored the developments mainly in the branches of the five banks that were affected, spread all over the country reported that the situation affected the banks, their branches and locations differently.

While some of the banking halls appeared deserted because of the use of the Automated Teller Machines (ATMs), in others there were long queues.

Normal Mondays usually witness long queues in the banking halls because of weekend expenses, but there were signs to suggest that yesterday's queues were not normal.