CBN to Support Skye Bank for One More Year

The Central Bank of Nigeria has extended guarantees to Skye Bank Plc for another year, while it considers the bank’s recapitalisation proposal, the mid-tier lender has said.

The CBN had last year shored up Skye Bank with N100bn capital injection, after sacking its top management for failing to meet minimum capital requirements.

The central bank then appointed a new management team.

In a newspaper advertorial on Tuesday, the bank said it had recovered N60bn in bad loans, closed some branches and sold four subsidiaries to boost capital in the past year.

It was in talks with shareholders and investors last year to raise N30bn but suspended the plans when weak oil prices hit capital markets and drove foreign investors away.

“The bank continues to require assistance from central bank and government as it repairs the damage inflicted on the institution in the past and charts a sustainable path forward for the bank,” Skye Bank said.

It said it had also reached restructuring agreements with many of the chronic bad debtors resulting in improved payments and prospects of future recoveries.

The CBN designated Skye Bank as one of systemically important banks due to the size of total deposits it holds after it acquired Mainstreet Bank.

This means it has to increase its capital adequacy ratio to 16 per cent, the industry average.

The bank said it had appointed advisers to guide it on a recapitalisation process and that it had identified various options with proposals being considered by the CBN

Skye Bank’s management said it had implemented cost-management initiatives in its efforts to stabilise the bank.

The measures, it said, had enhanced liquidity and efficient service delivery to its customers since the CBN intervened in the bank one year ago.

The bank management said this in the advertorial, which was jointly signed by the Chairman of the bank, Mr. M.K. Ahmad, and the Group Managing Director, Mr. Adetokunbo Abiru.

It noted that through the support of the CBN, it had successfully embarked on initiatives to restructure and reposition the financial institution based on its broad mandate which includes cost management and optimisation, as well as divestments to improve the bank’s financial position.

Source: Punch