Nigeria’s central bank replaces Skye Bank head over capital inadequacy

Nigeria’s central bank has replaced the chairman and chief executive of Skye Bank after the lender failed to meet minimum capital ratios, Governor Godwin Emefiele said on Monday.

“The basic issue is capital adequacy and liquidity. From what we see, adequacy ratio in the bank has been weakening and we don’t want it to get to a point where depositors will be at risk,” Emefiele said.

The central bank said Skye Bank’s non-performing loan ratio has been above the regulatory limit for a while.

According to Emefiele, after conducting a stress test, the central bank decided it was best to replace the chairman, chief executive and all non-executive directors after they failed to recapitalise the bank. However, Reuters reports that Skye’s chief executive Timothy Oguntayo had resigned before the central bank announcement. The central bank appointed Tokunbo Abiru from First Bank to replace him.

Meanwhile, Emefiele has moved to allay the fears of Skye Bank customers. He declared that “(Skye) bank is not in distress and remains able to continue banking activity.”

Skye Bank, which had in 2014 acquired Mainstreet Bank from AMCON, last year suspended plans for a rights issue due to weak market conditions. It is reportedly in talks with shareholders and new investors to raise N30 billion naira ($150 million) in a bid to to hit a minimum capital adequacy rate of 10 percent.

The shares of Skye Bank listed on the Nigerian Stock Exchange fell by 9.52 percent on Monday to close at N0.95 per share.