Skye Bank has said it is seeking to dispose of majority stakes in its
businesses in Gambia, Guinea, and Sierra Leone in a bid to ease pressure
on capital.
With this move, the bank seeks to relinquish its international licence and become a National Bank.
National banks require a capital adequacy ratio (CAR) of 10 per cent as against 15 for international banks.
The Central Bank of Nigeria (CBN)
replaced the bank’s management on July 4th, citing liquidity, capital
adequacy, and asset quality issues. The bank’s ratios were well below
regulatory requirements as at full year 2015. Its non-performing loan
(NPL) ratio was at about 13 per cent (regulatory maximum: 5%), capital
adequacy at about12 per cent (regulatory minimum: 15%), loan-to-deposit
ratio at about 98 per cent, and liquidity ratio at about 22 per cent
(regulatory minimum: 30%).
Therefore, in order to improve liquidity
the CBN had injected about N100 billion (one-year tenor) into Skye since
the change in management
We expect that an expansion of risk
weighted assets on the back of the depreciation of the naira may have
put further pressure on CAR which may have declined significantly below
the 12 per cent reported for full year 2015, analysts at CSL
Stockbrokers Limited stated.
From our discussion with a top management
official, we understand that management had communicated the intention
to divest off its foreign subsidiaries since May and the process is
nearing completion. The bank is currently auditing half year numbers
which will give a more current assessment of the bank’s capital ratio.
Furthermore, CSL Stockbrokers Limited
stated that while they realise that the bank still has liquidity and
asset quality issues, they viewed the move by the bank to divest from
its foreign subsidiary “as a practical option to begin with.”
Therefore, in order to improve liquidity
the CBN had injected about N100 billion (one-year tenor) into Skye since
the change in management
We expect that an expansion of risk
weighted assets on the back of the depreciation of the naira may have
put further pressure on CAR which may have declined significantly below
the 12 per cent reported for full year 2015, analysts at CSL
Stockbrokers Limited stated.
From our discussion with a top management
official, we understand that management had communicated the intention
to divest off its foreign subsidiaries since May and the process is
nearing completion. The bank is currently auditing half year numbers
which will give a more current assessment of the bank’s capital ratio.
Furthermore, CSL Stockbrokers Limited
stated that while they realise that the bank still has liquidity and
asset quality issues, they viewed the move by the bank to divest from
its foreign subsidiary “as a practical option to begin with.”
By Obinna Chima/thisday
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