Central Bank of Nigeria, CBN on Monday announced the take over of the Board and management of Skye Bank Plc over liquidity issues.
CBN said the bank has failed to meet the regulator’s minimum key liquidity and capital adequacy ratios.
Godwin Emefiele, the Governor of CBN who announced the take over in Lagos also announced a new board and management for the bank following the resignation of the Chairman, Chief Tunde Ayeni, and Management Director/Chief Executive Officer, Mr. Timothy Oguntayo. The CBN named M. K. Ahmad and Tokunbo Abiru the new Chairman and Chief Executive Officer of the bank respectively. Both of them are now to bear the burden of turning around the bank’s huge liquidity challenge and quickly save it from collapse.
The CBN, however retained the most recently appointed Executive Directors of the bank.
Ahmad is the former director general of PENCOM and Tokunbo Abiru is the former Lagos State commissioner for finance
CBN governor Godwin Emefiele said that Skye Bank’s carries quite some huge bad assets that saw the Non-Performing Loans exceeding the allowed 5 percent threshold.
Emefiele said specifically that the new appointment was as a result of the lenders failure to meet minimum threshold in critical prudentials and adequacy ratios.
“In particular, Skye bank liquidity and non performing ratios have been below and above threshold respectively”, Godwin Emefiele said in Lagos at a press conference.
Earlier reports said Skye Bank was thought to have an estimated non performing loan portfolio of N700 billion, much of which is due to an overexposure in the oil and gas sector.
More of the banks were feared to be equally facing tight liquidity challenges but Emefiele, at the press Monday afternoon doused the fears, saying the apex bank was yet to find any more banks such dire situation.
The Nigeria Deposit Insurance Corporation (NDIC) disclosed recently that Deposit Money Banks’ NPLs reached 4.87 percent in 2015, a situation currently raising concerns around quality of assets in the industry, eventhough though still within the regulatory threshold of 5 percent.
In its 2015 Annual Report, NDIC had said the industry’s loans and advances to the Nigerian economy stood at ₦13.33 trillion in 2015, indicating some 5.56 percent increase over the ₦12.63 trillion reported in 2014.
“The non-performing loans to total loans ratio for the industry increased from 2.81% in 2014 to 4.87% in 2015, but was within the regulatory threshold of 5%,” the Corporation noted in a mailed summary report.
Governor Emefiele, told journalists that the CBN had been discussing with the Oguntayo’s led management on the need to quickly reverse the huge bad assets which they were practically unable to do till he exited as the bank’s CEO. Oguntayo, led Skye Bank to acquire nationalised lender Mainstreet Bank in 2014,
Emefiele said the CBN hopes the new management would be able to salvage the bank from collapse, explaining the reasons for the swift change.
Skye Bank, a Nigerian based commercial bank and one of the twenty-six (26) commercial banks licensed by the CBN is a large financial services provider in West Africa and Central Africa. With headquarters in Nigeria, the bank maintains subsidiaries in Sierra Leone, the Gambia, the Republic of Guinea, Liberia, Angola and Equatorial Guinea.
As at December 2014, the bank had grown its loan portfolio by 18.4% and saw its assets hit N1.42 trn
The bank’s loans and advances grew from N549.9 billion in 2013 to N651.3 billion in 2014. Specifically, Skye Bank recorded total assets of N1.42 trillion, representing a 26.8 per cent growth over the N1.12 trillion recorded during the corresponding period in 2013.
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