CBN clears the air, says no Nigerian bank distressed

Posted by Amechi Obiakpu | 5 July 2016 | 2,886 times

Gmail icon


The Central Bank of Nigeria (CBN) has debunked the notion that some banks in the country are under distress.

The apex bank which made the statement at the appointment of the new board of Skye Bank on Monday, said the banking industry is in good health.

Addressing journalists at the CBN Lagos Office, CBN Governor, Godwin Emefiele averred that “the strategic health of the Nigerian banking industry remains good and that there was no need for Nigerians to worry.”

“CBN regularly conduct test on the banks in the country to ascertain the state of health of the banks and I can tell you today that no Nigerian bank is under distress, once there is a change, you will be informed,” Emefiele said.

On the replacement of the board members of Skye Bank after the resignation of its former management team, Emefiele said the bank was not distressed but was in an unhealthy state.

This, the CBN boss said, necessitated the move by the bank to avoid an irreversible situation and to save depositors fund.

He said: “These proactive moves have become unavoidable in view of the persistent failure of Skye Bank PLC to meet minimum thresholds in critical prudential and adequacy ratios, which has culminated in the bank’s permanent presence at the CBN Lending Window. In particular, Skye Bank’s Liquidity and Non-Performing Loan Ratios have been below and above the required thresholds, respectively, for quite a while.

“To correct the anomalies in the bank, the CBN had several meetings with the management and board of Skye Bank as part of our strategy of close engagement whenever a bank’s financial or governance situation poses potential threats to the overall stability of our financial system. Despite the expectation of relevant regulators, market watchers, financial analysts and interested stakeholders that Skye Bank should be doing much better than it is right now, we have seen about the opposite in reality.”

“Given the aforementioned issues and the fact that Skye Bank is a Domestic Systematically Important Bank (SIB) with significant interconnectedness, the CBN would be failing in its duties if it does not take immediate action to nip the steadily declining health of the bank in the bud and correct the situation.”

Continuing Emefiele said: “I want to state here that no Nigerian bank is under distress and I hereby assure customers of the banks to go about their businesses knowing that our banks are strong and in good health.”

•Photo shows CBN Governor Godwin Emefiele.


Source: News Express

Readers Comments

0 comment(s)

No comments yet. Be the first to post comment.


You may also like...