Fortis MFB liquidation was the last option – NDIC

The liquidation of the Fortis Micro Finance Bank was the last option in the series of interventions taken by the supervisory authorities, the Nigeria Deposit Insurance Corporation (NDIC) has said.

Responding to a statement attributed to financial experts, Mallam Garba Kurfi and Mr Boniface Okezie, National Coordinator of Progressive Shareholders Association of Nigeria (PSAN), published in Daily Trust which alleged that the two regulators-Central Bank of Nigeria and the NDIC  made no prior attempt to salvage the ailing bank before its eventual liquidation, the NDIC said in a statement yesterday that the claims are baseless and unfounded.

It added: “It should be noted that the various examinations and supervisory interventions of CBN and NDIC revealed that the bank was being run in an unsafe and unsound manner leading to huge non-performing loans, high cost of funds (foreign and domestic borrowings, and fixed/term deposits), exorbitant administrative and personnel costs (especially high emoluments to successive CEOs), and poor corporate governance practices, all of which impacted negatively on its financial condition. As a consequence, the bank was illiquid, could not honour its obligations to its depositors, and became insolvent.” The NDIC said the unhealthy condition of the bank degenerated to the extent that the CBN removed the Management of Fortis MFB Plc in February 2018 and appointed a four (4) person Interim Management Committee (IMC) to take over the control and management of the bank.  The IMC which comprised of officers drawn from the CBN and NDIC, as well as an independent Chairman, were mandated to steer the bank back to sustainability.

“The IMC managed the affairs of Fortis MFB Plc for a period 10 months during which it did all it could to resuscitate the bank and began reimbursing depositors, using funds advanced by CBN for that purpose.”

“The above is contrary to the claim by Mallam Garba Kurfi, that the CBN/NDIC made no prior attempt to salvage the ailing bank before its eventual liquidation.  Unfortunately, due to the mismanagement of the bank by its erstwhile Board and Management, it could not be salvaged, hence its eventual liquidation.”

The general public is therefore urged to disregard the misleading claims in the publication and to remain assured that the NDIC will always be faithful and alive to its responsibilities in protecting Nigerian Depositors at all times.