Posted on Thursday, 18 August 2016 10:00

Nigeria central bank says Skye Bank safe, no need for panic withdrawals

By Chijioke Ohuocha

Photo©Sunday Alamba/AP/SIPANigeria's central bank is seeking to reassure Skye Bank depositors that the lender is safe and there is no need for them to rush to withdraw their funds in response to speculation that it has liquidated the bank, it said late on Wednesday.

The central bank injected more than 100 billion naira ($312 mln) into Skye bank last month after sacking its top management for failing to meet minimum capital requirements. It subsequently replaced Skye's top management.

Skye's non-performing loans had mounted to 13 percent of total loans at the end of last year, well above the central bank target of less than 5 percent while its capital ratio was 10.4 percent last year, compared with an industry standard of 16 percent, prompting the central bank to step in.

"The attention of the Central Bank of Nigeria (CBN) has been drawn to the content of a malicious message urging customers of Skye Bank to withdraw their deposits or transfer them to other banks based on the vile allegation that Skye Bank has been liquidated by the CBN," spokesman Isaac Okorafor said in a statement.

After replacing Skye's executives last month, depositors rushed to withdraw their funds. But the regulator has said Skye was able to meet its obligations and that the central bank would provide support until the new management could bring in fresh funds.  

Skye is the only Nigerian bank to report a loss in 2015. The central bank stepped in after depositors started withdrawing funds and avert wider problems within the banking sector.

Africa's top oil producer is struggling with one of the most severe economic crises it has had in decades. In July, central bank director of banking supervision, Tokunbo Martins, said "one or two" other commercial banks had failed liquidity tests but that they were not in the same situation as Skye.

Nigeria's central bank governor Godwin Emefiele has urged people not to panic about the banking system, saying he is on top of any problems resulting from the economic crisis.

Subscriptions Digital EditionSubscriptions PrintEdition









Music & Film



Keep up to date with the latest from our network :


Connect with us