CBN Extends Support to Skye Bank after N100b Intervention

By Modupe Gbadeyanka

One of the financial institutions earlier reported to be struggling, Skye Bank, has had its guarantees extended by the Central Bank of Nigeria (CBN) for another year.

According Reuters, the apex bank will continue to help the lender stay afloat after its initial N100 billion capital injection.

Skye Bank, in a statement, noted that the central bank was still considering its recapitalisation proposal.

However, it has appointed advisers to guide it on a recapitalisation process.

CBN designated Skye Bank as one of Nigeria’s 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 ratio to 16 percent, the industry average.

Last year, the banking industry watchdog sacked the top management of the financial institution for failing to meet minimum capital requirements.

But Skye Bank said it has recovered N60 billion in bad loans, closed some branches and sold four subsidiaries to boost capital in the past year.

“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.

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

Skye Bank shares rose more than 3 percent on Tuesday and were up 16 percent this year, after last year’s 68 percent plunge.

The bank, which posted a pre-tax loss in 2015, said it had submitted its 2016 accounts for approval.