The market had anticipated it. The Nigerian Stock Exchange (NSE) finally suspended Skye Bank on Monday, September 24, 2018. This was a logical consequence of the revocation of the Bank’s license by the Central Bank of Nigeria (CBN) on Friday, September 21st. Is the intervention of the regulator maintaining and the management and the board of directors of the bank late and incomplete?
In any case, the bankruptcy of an entity created by the merger of 4 small banks in 2006 represents a net loss for shareholders, including small shareholders on the stock market, in solidarity with the profits and losses of their business within the limit of their commitments. Will the Securities and Exchange Commission (SEC) help small shareholders?
For creditors and customers, however, better off with the protective umbrella of the Central Bank, it is the beginning of lengthy procedures to limit a break all predictable.
It should be recalled that the bank reported a loss of 37.65 billion naira ($ 123 million) in 2015. The 2016 accounts have not yet been released. Those of 2017 and 2018 seem compromised. Analysts question the passivity of the regulator and call for everything to be done so that the 4 banks that are currently undercapitalization are closely monitored.
The central bank’s audit of Skye Bank revealed that it needed urgent recapitalization that its shareholders were unable to provide. In the end, the Abuja-based regulator, which had already injected 100 billion nairas * ($ 30 million) into SKye Bank in 2016 and sacked its management for exceeding the liquidity threshold, was forced to withdraw the license . This is a bad signal to the market, a few months away from the presidential elections.
Note that the central bank of Nigeria has created Polaris, a bridge bank, for the recovery of assets and liabilities of Skye Bank, a way to avoid the contagion effect of the market. The strategy is for Nigeria’s asset management firm, Amcon, to capitalize on the bridge bank and start the investor search process, “said Governor of Nigeria’s Central Bank Godwin Emefiele.
Note that even before the announcement of the withdrawal of the license, the market had taken the lead. In its last transaction on Friday, Sept. 24, the Skye Bank stock was worth 0.77 naira, down 96 percent from its peak of 2008, when the bank was worth 202 billion naira ($ 660 million).
$ 1 = 305.30 nairas
