247 Nigeria News Update...We give you news updates all round the clock.
18 Jul 2017
JUST IN: CBN extends support for Skye Bank by one year
The Central Bank of Nigeria, CBN, has extended guarantees to Skye Bank for another year while it considers the bank’s recapitalisation proposal, it said in a statement on Tuesday.
In 2016, the Central Bank shored up Skye Bank with a N100 billion ($328 million) capital injection, after sacking its top management for failing to meet minimum capital requirements. It then appointed a new management team.
The apex bank said it had recovered N60 billion naira in bad loans, closed some branches and sold four subsidiaries to boost capital in the past year.
Trouble started for Skye Bank after it used short-term funds to buy local lender Mainstreet Bank in 2014 but failed to raise fresh cash. It was in talks with shareholders and investors last year to raise N30 billion 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 in a statement.
Restructuring agreements with many of the chronic bad debtors resulting in improved payments and prospects of future recoveries had also been reached, the bank added, according to Reuters.
In 2015, the bank recorded pre-tax loss, and had submitted its 2016 accounts for approval.
Due to the size of total deposits it holds after it acquired Mainstreet Bank, the central bank designated Skye as one of Nigeria’s systemically important banks. This means it has to increase its capital ratio to 16 per cent, the industry average.