Failed Banks in Nigeria have taught us tough lessons about what could go wrong in our financial system.

Nigeria’s banking sector has undergone dramatic reforms over the past two decades, yet it has also witnessed a string of high-profile collapses.

Understanding the histories of these failed banks in Nigeria is important for learning how mismanagement, weak oversight, and under-capitalisation can bring even large institutions to their knees.

Below, we explore each of the seven banks that lost their licences between 2002 and 2011, and draw lessons for today’s financial landscape.

Savannah Bank

Savannah Bank was among the first casualties, losing its licence in 2002 after repeated breaches of minimum capital requirements and governance lapses. Although the Central Bank briefly reinstated its licence in 2009, Savannah never restored public confidence or secured fresh capital. Its story highlights how regulatory enforcement and market trust must go hand in hand.

Societe Generale Bank of Nigeria (SGBN)

In 2006, SGBN failed to meet the Central Bank of Nigeria’s ₦25 billion recapitalisation threshold. Rather than continue under the old name, its viable assets and deposits were transferred to the newly formed Heritage Bank in 2012. This transition illustrates how recapitalisation drives can reshape the sector, spinning off stronger entities from weaker ones.

Oceanic Bank

Oceanic Bank’s collapse in 2011 sent shockwaves through the industry. An audit uncovered extensive insider lending, non-performing loans, and outright fraud. The Central Bank moved swiftly: depositors were protected by merging Oceanic into Ecobank, while senior executives faced prosecution. Oceanic’s fall underscores the vital role of transparent lending practices and rigorous internal controls.

Bank PHB (Platinum Habib Bank)

Bank PHB—later known as Platinum Habib—was unable to raise fresh capital during the 2011 consolidation. Its licence was revoked, and its assets were handed over to Keystone Bank. The bank’s demise, despite earlier merger-based growth, shows that scale alone cannot substitute for sound risk management and adequate equity buffers.

Spring Bank

Formed in 2005 through the merger of four smaller banks, Spring Bank seemed poised for growth. Yet by 2011, it suffered severe liquidity shortfalls and governance breakdowns. Regulators revoked its licence and transferred operations to Heritage Bank, the same vehicle that absorbed SGBN. Spring Bank’s case proves that merger-driven expansion must be matched by disciplined financial controls.

Afribank

Afribank traced its roots to the 1950s and once ranked among Nigeria’s largest lenders. In 2011, however, insolvency and mounting bad debts led the Central Bank to place it into administration. Its assets and liabilities moved to Mainstreet Bank (later merged into Skye Bank). Afribank’s downfall is a stark reminder that longevity and market share offer no defence against systemic under-capitalisation.

Allstates Trust Bank

Allstates Trust Bank failed to meet the ₦25 billion recapitalisation requirement in 2005 and struggled with chronic compliance issues. Regulators revoked its licence, winding down operations entirely rather than transferring assets. This outcome highlights that even smaller, regional players must maintain robust governance to survive sector-wide reforms.

Lessons from These Failed Banks in Nigeria

Three recurring factors underpinned these failures: first, an inability to raise sufficient capital when the Central Bank steeply raised minimum equity levels; second, governance breakdowns that allowed insider abuses and non-performing loans to spiral; and third, a shift toward stricter regulatory enforcement under leadership like that of Governor Sanusi Lamido Sanusi.