The remaining14 banks were found to be in a sound financial state and did not require the CBN to take any action. The second approach was to carry out diagnostic audit through independent consultants. The report of the audit exercise revealed greater magnitude of weak financial condition of the nine banks. All of them were “technically” insolvent with significant negative asset value.
It also exposed several illegal activities that had been taking place in five of the affected banks. It was against this background that the CBN moved decisively to strengthen the industry, protect depositors and creditors, restore public confidence and safeguard the integrity of the Nigerian banking industry.