..Restates confidence
By Blaise Udunze
The Central Bank of Nigeria (CBN) has affirmed its confidence in Skye Bank Plc., through a guarantee line, which ensures that withdrawals it suffered in the wake of the undue panic recently does not adversely affect its operations.
This development, analysts believe, lends credence to the regulator’s earlier assertion that Skye Bank is a Strategically Important Bank (SIB), with substantial market share, interconnectedness and significant relevance to the nation’s financial systems stability.
A leading international news organisation, Bloomberg, reports that the apex bank confirmed this development through a statement by the CBN spokesman, Isaac Okoroafor, who said the undisclosed guarantee sum would assist the bank to shore up its liquidity and maintain its level of operations.
“The short-term lending facility will allow the management of the bank to ensure that some withdrawals it suffered in the wake of the undue panic recently do not adversely affect its operations,” Okoroafor said.
In addition, “the CBN issued guarantees to depositors and creditors of Skye Bank as a demonstration of the bank’s health,” Okoroafor further explained.
The guarantee line is coming on the heels of CBN’s recent intervention in the bank following the voluntary resignation of the Board of Directors of the bank and the consequent re-constitution of the board with a new management team led by Mr. M. K. Ahmad and Mr. Adetokunbo Abiru, who emerged as Chairman and Group Managing Director respectively.
The CBN guarantee will not only enhance Skye Bank’s interbank trading and activities but also provide assurance to other banks to continue to deal with and trade with its instruments in the interbank market.
The CBN had similarly introduced a bank credit guarantee package for some banks in 2009 in the wake of the global economic crisis, which affected both the local and global financial markets.
The bank guarantee programme enables financial institutions to meet their financing needs during a period of record high credit spreads and aids the successful return of the credit market to near normalcy, despite the recession and slow economic recovery.
The affirmation of confidence in Skye Bank continues to grow as no fewer than two state governments have expressed confidence in the bank’s ability to deliver on crucial mandates in the last two weeks. First, it was the Lagos State government, which directed its Ministries, Departments and Agencies (MDAs) to establish business relationship with the bank on account of its track record and pedigree in mandate execution.
“We had earlier reported that on Monday, July 18, 2016, the Kogi State government re-appointed Skye Bank as lead collecting bank for its Internally Generated Revenue (IGR) and services. The appointment ensures that the bank is responsible for collecting all its revenue just as other agent banks are required to pay their collections to Skye Bank on behalf of the state government.”