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.
The bank made this know in a statement on Tuesday.
It would be recalled that in 2016, the CBN 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 for the bank.
Skye Bank said in a statement on Tuesday that it had recovered N60 billion naira in bad loans, closed some branches and sold four subsidiaries to boost capital in the past year.
The problem of the lender began after it bought Mainstreet Bank in 2014 but failed to raise fresh cash, Reuters reports. 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 the statement.
“We have also reached settlement and restructuring agreements with many of the chronic bad debtors resulting in substantially improved payments and prospects of future recoveries,” it added.
Skye in 2015 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.
The bank has been postponing releasing its audited account for the 2016 accounting year four months after it was due. It kept giving writing the management of The Nigerian Stock Exchange giving excuses for the failure to comply with post-listing requirement of The Exchange the as concern timely release of results.