Panic withdrawal: CBN boosts Skye Bank’s liquidity

The Central Bank of Nigeria (CBN) has provided a loan to Skye Bank Plc to

boost its liquidity after panic withdrawal by customers from the lender forcing a
liquidity shortage.
The CBN early this month changed the management of the bank due to the
insider loan scandal, the process which triggered massive withdrawals by
customers.
The short-term lending facility will allow new management to “ensure that some
withdrawals it suffered do not adversely affect its operations,’’ Isaac Okorafor, a
spokesman for the CBN, said in an e-mailed response to questions by
Bloomberg
It would be recalled that the CBN replaced top managers of Skye Bank earlier
this month after it was said to have breached required thresholds for liquidity
and non-performing loans.
While the regulator moved to calm markets, saying Skye Bank and the industry
remained healthy, the stock plunged to record lows, leading declines among
other Nigerian lenders.
When Daily Trust sort to know the amount advanced to Skye Bank, the Apex
Bank spokesman decline to disclosed the amount stressing that it would be out
of place to do so.
“I cannot open the pages of a commercial bank on the pages of the newspaper.
But I can confirm to you that based on the occurrences of the last two week
which have seen people removing their funds from the bank, the apex bank
decided to provide a short term life line to enable the bank stabilize” he said.
The affirmation of the CBN that it has no plan to sell Skye Bank saw the
shares of the bank rose for the fourth straight day, gaining 9 percent to 85 kobo
Meanwhile, the naira yesterday appreciated to 374/dollar after falling to record
low of 378/dollar on Wednesday at the pararrel market. Traders in Abuja said
the reverse was due to the slow demand for forex in the market.