"We assure every depositor that no one will lose money and we will continue to support the banks and all Nigerian banks."

He said the banks in question had given too many bad loans and over-invested in the capital market and in the oil and gas sectors when commodity prices were high.

Bank probe

Afribank, Finbank Intercontinental Bank, Oceanic Bank and Union Bank were identified as problem banks by auditors during the first round of a central bank inquiry, covering 10 of the country's 24 banks.

Sanusi said four of the banks "were clearly unable to repay their obligations".

The five institutions account for 40 per cent of banking sector credit in the country and the executives removed included members of Nigeria's corporate aristocracy, long seen as almost untouchable.

Mcarthey Mbadugha, a financial analyst, said: "The punishment, the sacking of the management is severe. I think it will make the banks involved sit up.

"Any new management that comes in place, would see to it that the reason that resulted in the sacking of the previous management will not work."

The local naira currency fell about two per cent against the US dollar after the bank bailout was announced and may weaken further if traders take the view that the crackdown on the banking sector could destabilise Nigerian financial markets.

Nigeria's financial sector has become the key driver of sub-Saharan Africa's second biggest economy and a systemic banking crisis would be disastrous.

Nigeria is one of Africa's biggest oil producers and is considered to be the centre of West Africa's banking industry.