The history of financial industry (banking) dates back to the colonial era when the African Banking Corporation (ABC) was established in 1892, to distribute currency notes of the Bank of England for the British treasury. The development of this ABC or what was later on called British Bank for West Africa (BBWA) by 1894, later became Standard (SB) and subsequently First Bank of Nigeria (FBN) to date, was informed by the colonial entrepreneurs who needed banking services to back their trade transactions in Africa. And in the same vein, to address the credit needs of antagonist, Nigerians later ventured into banking business initially through private individual initiatives and later through government policy. Problem of distress in the Nigerian financial industry (banking) as well as
outright bank failure dates back to 1930, when the first bank failure was reported.
Indeed between 1930 and 1958 when the Central Bank of Nigeria (CBN) was established are twenty-one (21) bank failures were reported or recorded. However
the degree of intensity and scope of the distress has never been as serious as has been observed since June 1989 when government and other public sectors deposits were withdrawn from commercial banks to Central Bank, in government's bid to deregulate the economy under Structural Adjustment Programe (SAP). This
directive, exposed the weak financial conditions of most of these banks, thus increasing the number of distressed banks, and the severity of the distressness. This
distressed condition has been traced to a wide range of causes some of which include, macro-economic shocks/instability, effects of financial reforms, changes in
prudential regulations and how the authorities of the affected countries respond to crises, as does Nigerian authorities.
Since 1987 when the then government initiated a wide range of reforms aimed at promoting efficiency in the Nigerian financial industry, various write-up by
the relevant supervisory and regulatory agencies (CBN/NDIC) were collected and analysed for this study. That is both CBN/NDIC quarterly and economic review
publications, journals and some public dailies (newspapers) were the sources and methods used in bringing out this study right from 1989 to date. All these materials are what constitute secondary data that make possible the compilation.