• Wednesday, June 12, 2024
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CBN to inject liquidity to stabilise Skye Bank


There are strong indications that the Central Bank of Nigeria (CBN) will inject  huge but yet undisclosed  sums of money into the Skye Bank to resuscitate it but will hand down some tough conditions that the ailing lender must comply with to take up the loan.

The actual amount could not be ascertained at press time but BusinessDay reliably gathered that the apex bank officials have been meeting with the management and board members of Skye Bank for talks on how to get the bank properly on its feet.

A top CBN official who confirmed the meeting said the CBN would be mandating the bank to recover the non-performing assets that had troubled the bank as one of the pre-conditions for such facility. The meeting held at the CBN head quarters in Abuja, on Monday, following  an earlier one held last week between both parties.

The CBN earlier in the month stepped in and replaced the management of Syke Bank Plc with fears that it could collapse and cause a whirl-pool effect on the rest of the industry if urgent steps were not taken.

CBN governor Godwin Emefiele, in justifying the intervention, said Skye Bank plc, a tier 2 bank, but one of Nigeria’s eight systemic important banks, failed to meet the minimum thresholds in critical prudential and adequacy ratios. Skye Bank likewise sustained a permanent presence at the Apex bank lending window, which exposed its liquidity challenges.

The bank was said to have an estimated non performing loan portfolio of N700 billion, much of which is due to an overexposure to the oil and gas sector.

“The CBN is going to pump in money to stabilise the bank,” the source told BusinessDay last night.

Emefiele had appointed M. k Ahmad and Tokunbo Abiru respectively, as the new Chairman and Chief Executive Officer of Skye Bank. Both men now bear the huge burden of turning around the bank’s huge liquidity challenge.

The bank’s former Chairman, Olatunde Ayeni; Managing Director, Timothy Oguntayo; the Deputy Managing Director, Non Executive Directors; Independent Directors; and the two longest serving Executive Directors all voluntarily resigned just ahead of a Central Bank pronouncement that it had dissolved the board and removed part of the management over capital adequacy issues.

The CBN, however retained the most recently appointed Executive Directors of the bank, but governor Emefiele had argued that the bank was not in distress and urged depositors not to panic as their deposits were safe.

Emefiele, however, confirmed at the time that Skye Bank carries quite some huge bad assets that saw the Non-Performing Loans exceeding the allowed 5 percent threshold.

“In particular, Skye Bank liquidity and non performing ratios have been below and above threshold respectively”, the governor said, as he announced replacements for the bank’s management and board on July 4.

Emefiele said the CBN hopes the new management would be able to salvage the bank from collapse, explaining the reasons for the swift change.

Onyinye Nwachukwu