Nigeria’s Skye extends decline to record low as Diamond plunges

Nigeria’s Diamond Bank Plc and Skye Bank Plc slumped for the third day in a row after the central bank stepped in to remove Skye’s top management a week ago.

Diamond Bank plummeted 9.5 percent to 1.82 naira and Skye Bank slid 9.2 percent to 79 kobo, a new low, as of 11:58 a.m. in Lagos, Nigeria’s commercial capital. Diamond has declined 21 percent since the July 4 intervention by the central bank, while Skye’s stock has given up 25 percent, making Skye the third-worst performer on the 171-member Nigerian Stock Exchange All Share Index this year.

Nigeria’s central bank replaced Skye’s chief executive officer, chairman and 10 other directors on July 4, saying the intervention was necessary after the Lagos-based bank’s liquidity and non-performing loan ratios consistently breached required levels. While the central bank moved to calm markets, saying Skye and the industry remained healthy, analysts including Pabina Yinkere at Vetiva Capital Management Ltd. highlighted fears of contagion.

Other banks are also suffering in the aftermath of the central bank’s intervention. Fidelity Bank Plc, Wema Bank Plc and Union Bank of Nigeria Plc each fell more than 4 percent in morning trade while Access Bank Plc and United Bank for Africa Plc both slumped more than 2 percent. FBN Holdings Plc, owner of First Bank of Nigeria, dropped 5.8 percent. The decline in banking stocks helped pull the all share index 0.9 percent lower.