The Central Bank of Nigeria (CBN) is to convert the toxic assets of the nine troubled banks into government guaranteed bonds to ensure growth.

The apex bank said in a statement that this would be achieved by fast -tracking the establishment of the Assets Management Company (AMC). Through this, investors would buy into the bonds to ensure liquidity for the affected banks, it added.

" We are in the process of setting-up an Asset Management Company (AMC) in conjunction with the Federal Ministry of Finance. The AMC will take impaired assets off the banks’ balance sheets and replace them with government guaranteed bonds. This will provide liquidity to the entire Nigerian banking system and bolster the prospects for long-term growth", it said.

CBN, in a statement signed by its Head, Corporate Affairs, Mohammed Abdullahi, said its intention is to transfer the affected banks into the hands of institutions and people that will safeguard the interests of depositors.

He, however, said that CBN would place a great deal of emphasis on the technical capabilities of the interested parties.

The CBN admitted that the recent audit exercise failed to reveal all the grey areas in the operations of the nine troubled banks.

It argued that the third quarter results revealed certain critical issues not discovered by the joint audit committee set up to investigate the banks.

"Following more detailed investigations, the new management of these banks found the situation in a number of the affected Banks to be worse than had been originally thought. A number of issues only came to light after the CBN had put in place new management teams who had access to greater and more up to date information.

As a result of these findings, the banks had to make provisions over and above the CBN’s initial recommendations", it said.