Skye Bank gets N100bn loan from CBN, amidst 2015 poor performance

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The Skye Bank Plc has said it got more than N100 billion cash from the Central Bank of Nigeria (CBN), in July, to shore up its operations. The bank spoke through its new managing director, Tokunmbo Abiru, who said the central bank staff had worked at the bank to support the lender.

The CBN has provided a loan to Skye Bank Plc to boost its liquidity after panic rush by customers to withdraw their cash from the lender forced liquidity shortage. The short-term lending facility would allow the bank 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, said Isaac Okorafor, a spokesman for the CBN.

Skye Bank Plc, posted a loss after tax of N40.73bn in its audited year ended December 31, 2015, compared with N18.72bn profit it made the previous year. Still on the banking sector, following CBN Monetary Policy Rate raise to 14 per cent, Fitch has warned that Nigeria banks are likely to face more challenges as the rate continues to rise. In a publication on its website last week Friday, Fitch said, “Rising rates are likely to put additional pressure on banks asset quality.

Almost all lending is extended at floating rates and banks should be able to reprice their loans quite quickly but borrowers will face more difficulties in servicing their debts.

“Impaired loans are already high in the Nigerian banking sector, where average non-performing loan ratios reached 6.2 per cent at end March 2016, partly reflecting the impact of currency depreciation on businesses as well as higher oil-related problem loans at some banks. ” It noted that with rising rates, excess liquidity in the banking sector was likely to flow into additional holdings of higher-yielding government debt.

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