Nigeria's Central Bank takes over Skye Bank, customers panic

The Central Bank of Nigeria (CBN) on Monday announced the takeover of a local bank, Skye Bank, citing ‘‘persistent failure of Skye Bank PLC to meet minimum thresholds in critical prudential and adequacy ratios.’‘

According to the apex bank, taking over Skye bank was unavoidable also because it’s failures had resulted in the bank’s permanent presence at the CBN’s Lending Window.

The announcement by the CBN created near panic as clients of the bank trooped to branches to withdraw their savings for fear of losing their monies.

Bank Customers no dey smile.
they besieged Skye bank after news broke out that CBN has fired top management. pic.twitter.com/Ui2WgORs8b

— gwenshuga1 (@gwenshuga) July 4, 2016

The Central Bank and Skye, both allayed any such fears because according to the CBN, ‘‘Skye Bank is not in distress and remains a healthy bank in the system. The CBN hereby assures depositors, shareholders and all relevant stakeholders that there is no reason for concern or panic as we seek their continued cooperation at this time.’‘

9.#SkyeBank #CBN restates that Skye Bank is not in distress and remains a healthy bank in the system

— Central Bank Nigeria (@cenbank) July 4, 2016

10.#SkyeBank #CBN assures depositors, shareholders and all relevant stakeholders that there is no reason for concern or panic

— Central Bank Nigeria (@cenbank) July 4, 2016

Preceding the takeover however, the Chairman of the bank’s board, the Managing Director and other top ranking officials of the bank tendered in their resignations with immediate effect.

The CBN subsequently replaced the board and management teams of the bank in a bid to steer the bank from any issues going forward.

According to a CBN statement on the takeover, ‘‘It will be recalled that the medium-term vision of the CBN, which was unveiled in June 2014, indicated that the bank would proactively manage potential threats to financial stability, maintain zero tolerance on practices that undermine the health of financial institutions, and create a strong governance regime that is conducive for financial intermediation, innovative finance and inclusiveness.

‘‘It is in furtherance of these commitments that the CBN has made the changes and assures the incoming Board and Management of its unflinching support during this transition period,’‘ the statement added.