Reports say three people including policemen are feared killed in the robbery operation.
The hoodlums had reportedly gone straight to the police station in the town and attacked the men on duty before proceeding to where the three banks in the town are located.
According to an eyewitness, explosives were used and the rains concealed the sounds of the gunshots that went on for about an hour. There was pandemonium around the campus of Bowen University.
The armed men carted away large sums of money, vandalised Automated Teller Machines (ATMs).
The banks robbed were Skye Bank, Sterling Bank and First bank.
The university was reportedly not attacked.
A resident said that the streets were deserted as robbers and policemen exchanged fire during the operation.
“Armed robbers attacked the banks in Iwo today. They came this evening and first went staring to the police station and attacked their men there. After that, they went to the area where the banks are located and carried out their operation.
They killed three policemen and the police also killed one of the robbers. It is a terrible day here in Iwo. I think the banks were aware that they could be attacked because they have been closing by 12noon for the past two months or thereabout.”