Skye Bank Plc has received over N100bn in liquidity from the Central Bank of Nigeria since July 4 to shore up its operations, its new Managing Director, Mr. Tokunmbo Abiru, has said.

He told reporters on Friday that the CBN staff had been working at the bank for two weeks to support the lender, Reuters reported.

The CBN had said it provided a loan to the lender to boost its liquidity after Skye Bank breached requirements on capital and lending, a development that made the central bank to replace its Board of Directors and management.

The short-term lending facility will allow new management to “ensure that some withdrawals it suffered in the wake of the undue panic of last week do not adversely affect its operations,’’ the Acting Director, Corporate Communications, CBN, Mr. Isaac Okorafor, had said in an emailed response to questions.

He said the CBN had also issued guarantees to the bank’s depositors and creditors as a demonstration of its health.

The CBN had replaced the top managers of the bank earlier.

But while the regulator has moved to calm markets, saying Skye and the industry remained healthy, the bank’s stocks have been plunging to record lows.

The CBN has said it has no plan to sell Skye Bank.

The CBN guarantee will not only enhance Skye Bank’s interbank trading and activities; but will also provide assurance to the other banks to continue to deal with and trade with the bank’s instruments in the interbank market.

Meanwhile, Abiru disclosed that the bank posted pre-tax loss in 2015. Similarly, Learn Africa Plc, Caverton Offshore Support Group Plc and ABC Transport Plc recorded losses of various degrees in their 2016 half-year financial results

Skye Bank recorded a loss of N40.7bn for 2015 financial, which is a drop from N18.7bn profit recorded the previous year.

Learn Africa posted a loss before tax of N352.1m for 2016 H2 versus loss of N167.1m a year ago, according to the figures presented by the firm to the Nigerian Stock Exchange on Friday.

Its half-year ended June 2016 revenue was N135.7m compared to N444.3m a year ago.

Caverton Offshore Support though reported a group half-year revenue of N9.14bn compared to N11.91m a year ago, recorded a group loss before tax of N2.36bn versus profit of N1.76bn a year ago.

ABC Transport also reported a half-year loss before tax of N333.8m for 2016. It had reported a profit of N64.5m a year ago. Its half-year ended June 2016 group revenue was N3.71bn compared to N3.31bn a year ago.

Millz404:
Any which way... My small money in that bank shouldn't be played with... If not na one plasma wey i don d eye for one branch i go use screw driver go loose

blueseacats:
Why does Skye bank need a bailout pls?

tboius:


The lifeline, like I said earlier was not an injection of funds to the bank. It was necessary to further mitigate the consequences of massive cash withdrawals from the bank as a result of the announcement of change in the bank's management.

Deposit is the blood of the commercial banks, loss of the deposit will be aneamic to their survival, therefore the life line/ window to continually allow her smooth operations, regain the lost funds, guarantee customers confidence like you and I, Dorisk, Millz404 & co and to get back to business In order to remain healthy as affirmed by CBN. The bank is one of the systemically Imporatnt Banks in Nigeria that cannot fail. This is not to say that we have banks that can fail in Nigeria as at today. The Soludo's CBN Post consolidation era in 2005-2006 has made it difficult for any bank to fail or be liquidated.

steffans:
So CBN get dis kind money?

Buhari pays salary slowly..

Rio Olympic athletes have gotten nothing from d FG.. I suppose!


She how dey kept Keshi's family in d sun et Al..


Is d country really broke?

tboius:
Good move by the Regulator.

This pertinent in the mood for damage control as her announcement for change in the Skye bank's management caused the panic withdrawal hence the need to hurriedly salvage the situation.

For avoidance of doubt a N100b life line is an institutional credit guarantee for the bank's transaction in the money market and not a direct inflow of cash. It's still at a cost but will mean that should in case a number of depositors decide to move N100b at once from the commercial bank the CBN guarantee will allow it to pass without affecting the continuous operations of the bank. In actual fact, this is almost impossible. The direct implication is to guarantee depositors that their funds are safe with the bank which will further stem the bleeding (loss of deposit as blood of the bank). The sound health of these banks is mutually exclusive to financial and economic stability of the country.

P.S: Let's I forget the situation with Skye Bank is not unconnected with the prevailing economic situation of the country , the withdrawal of public sector fund through TSA etc these also affect a few other banks in the country. From confirmed source, CBN has decided to manage the situation with other affected banks as the evolving panic that characterized that of Skye bank was not envisaged.

This is a call for the DMBs to change their strategy and focus more on retail banking and other innovative banking that will stimulate economic growth, aggregate demand,employment generation and reduce the galloping inflationary rate which has reached its ever highest of about 20%.

Often times the economic situation of Nigeria has defiled most economic theories, hence we have to look inwards for indigenous economists with solutions to our peculiar situation.

God bless Nigeria!

DorisK:


Yea, right. So they get back to biz....And if per chance they happen to still fall out of biz, What will be my lot? I will start writing letters and memo to CBN and visiting head quarters and stuff. ... or do I look for u here on Nairaland?

Wize1:


Thanks for the insightful comment. Definitely learnt a thing or two. Cheers!

tboius:


@DO RISK! learning is of focus on Nairaland. If you haven't taken anything from my posts, you can as well save all your kobo kobo under your mat! Certainly you can't do more than your "best"....

tboius:


The lifeline, like I said earlier was not an injection of funds to the bank. It was necessary to further mitigate the consequences of massive cash withdrawals from the bank as a result of the announcement of change in the bank's management.

Deposit is the blood of the commercial banks, loss of the deposit will be aneamic to their survival, therefore the life line/ window to continually allow her smooth operations, regain the lost funds, guarantee customers confidence like you and I, Dorisk, Millz404 & co and to get back to business In order to remain healthy as affirmed by CBN. The bank is one of the systemically Imporatnt Banks in Nigeria that cannot fail. This is not to say that we have banks that can fail in Nigeria as at today. The Soludo's CBN Post consolidation era in 2005-2006 has made it difficult for any bank to fail or be liquidated.