Financial analysts differ with CBN over Skye Bank takeover

new-cbn-emefiele-2014Analysts have differed with the Central Bank of Nigeria over what they called the regulator’s selective judgment that led to the sudden resignation of the key Board members of Skye Bank Plc and the appointment of new ones by the Central Bank of Nigeria accusing the apex bank of double standard when compared the way the CBN handled similar issues involving the Wema Bank and Unity Bank Plc in the recent past.

According to one of Nigeria’s most respected financial analysts who sit atop a financial consulting firm, the CBN should have employed the same strategy it deployed to Wema Bank and Unity Bank Plc when the two money deposit banks ran into troubled waters. He described the CBN move as the best in the circumstance and that the development portends a dangerous and disturbing signal for the financial industry.

According to the top financial expert, who will not want his name in print, “lets take it that truly Syke Bank has liquidity issue and the bank is failing in its responsibilities to her depositor, all the CBN needs to do was to provide the necessary life line while in mandates the investors and shareholders to put their house in order just as it did with Wema bank and Unity Bank. In his words, what the CBN has done in this case pointed to some unclear undertone.

He opined that very few banks in present day Nigeria are not having the same problem with Skye Bank. If the CBN had taken a friendlier and quiet measure, the bank would have been able to swim out of this turbulence and this would have staved  off the simmering crisis in the financial market.

He believed that the CBN played to the gallery by over dramatising the challenges confronting the banks by wielding the big hammer through the sacking of the board and management. The CBN action would create the impression in the minds of the banking public that all is not well, not just with Skye Bank but many other money deposit banks and this can lead to a run on depositor’s funds thereby compounding the woes of the Banking sector.

The present day crisis bedeviling the banking industry in Nigeria was traceable to Federal Government’s policy withdrawing over N3 trillion from deposit banks as a of

Another top banker wondered why Skye bank was singled out. His submission: “the fact of the matter today is that since the Federal Government pulled out about N3 trillion from money deposit banks with the introduction of Single Treasury Account, TSA, and the delay in the payment of over N11 trillion owed local contractors by the government, a situation that has places all the banks in serious capital inadequacy challenges.

A former top official of AMCON querried why the CBN was in a hurry to apply the maximum measure. He claimed to be aware that through a letter to Skye Bank, the CBN gave the directors up to December 31st 2016 to recapitalize the bank and meet their obligations. The directors were in tune with the CBN in respect of this deadline. Why then the haste to descend on the bank six months ahead of the deadline. Six months would have offered the directors the time frame within which to recapitalize and meet their various obligations. If they did not, then you may be justified with any action you would have taken subsequently.

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