Liquidation is a regulatory option to solve a bank's problems, but there are procedures that are supposed to be adhered to before going to that final stage

Stanley Ngwaba Treasurer, Savannah Bank

"I think the writing was on the wall," Busola Solanke, head of research at SecTrust in Nigeria told the BBC's World Business Report.

"The operating performance of Savannah Bank over the last few years would have sent a red signal."

The bank's management has responded by accusing the central bank of trying to protect top government officials who had debts with the bank.

No instability

The closure of Savannah, one of the top ten banks in Nigeria, comes after months of denials by authorities that Nigeria's banking sector was under strain.

But analysts say it is unlikely to destabilise the banking sector.

"The impact is not going to be as severe as its size suggests," said Ms Solanke.

"Savannah has quite a huge asset base and the regulators might have felt it was the best time to intervene before there was any more damage."

A sign on the door of its Lagos headquarters assures account holders they will not lose their money and refers them to the Nigerian Deposit Insurance Corporation (NDIC), which has been appointed by the central bank as liquidator.

Conflicting reports

Savannah's Treasurer, Stanley Ngwaba claims he had no indication from the central bank about the closure.

"Liquidation is a regulatory option to solve a bank's problems, but there are procedures that are supposed to be adhered to before going to that final stage," he told Reuters.

Nigerian officials denied claims they failed to warn the management before closing the bank.

Savannah has not released company results for three years, but the central bank said draft accounts showed losses of 2.8bn naira (�12.8m; $18.3m) in 2000 and 694.9m in 1999.

The bank had 105 branches nationwide and employed more than 2500 people.