Economic and financial experts on Tuesday asked the Central Bank of Nigeria to disclose more details about why it appointed new members to the Board of Directors and management of Skye Bank Plc, saying the reasons the regulator had given so far were inadequate.
The CBN had on Monday replaced most members of the board and management of Skye Bank, after accusing the lender of falling short in the critical banking indicators of liquidity and capital adequacy ratios.
But financial experts, who spoke to our correspondent on Tuesday, said the CBN needed to tell the public what exactly went wrong with Skye Bank, insisting that there were more undisclosed reasons behind the apex bank’s action.
“The CBN needs to tell us what exactly went wrong; we need to hear more because the bank’s 2015 financial results and the first quarter of 2016 financial results are not out as we speak,” an analyst at BGL Plc, an investment bank and research firm, Mr. Femi Ademola, said,
He added, “We feel that the CBN needs to tell us what happened. Were there insider dealings? Did they (directors) steal money? What exactly went wrong that made the CBN to ask about 10 people to go?
“If it is the issue of capital, then the bank should have been asked to recapitalise. So, we need to know exactly what happened. We need to know the condition of their books.”
According to the analyst, Skye Bank may have had problems relating to inadequate capital due to high provisions for bad loans, but the CBN owes the duty to tell the public more.
He argued that despite the scanty information released by the CBN, many customers were still withdrawing their funds from Skye Bank.
Ademola, however, commended the CBN for the move, saying it would help to protect depositors’ funds.
The BGL analyst said, “We need to hear more about the state of Skye Bank and why the CBN took over. We don’t know whether we should call it a takeover or they just appointed some new people to the board.
“We cannot call it a total CBN takeover, but just a management change. This is because the shareholding is still the same. It is a good move but many people have been running to withdraw their money.”
The Chief Executive Officer, High Cap Securities Limited, Mr. David Adonri, also commended the CBN for the action, but said the central bank needed to have told the public what exactly went wrong.
He said, “We only just suddenly heard that the CBN had sacked the management of Skye Bank. If they have fallen short in the basic indicators such as non-performing loans, liquidity and capital adequacy ratios, it means the bank has been in distress.
“If they are not distressed, they should not have permanent presence at the CBN lending window. We need to hear more on this.”
Adonri also faulted it for allowing Skye Bank to take over Mainstreet Bank because the former had been in distress.
He said, “Let me commend the CBN for taking such an action. However, I still insist that it was improper to allow a bank in distress to take over a bank that was not in distress. Having taken over the bank, I hope they will be able to manage it back to health. Any bank that the CBN takes over, I am not sure if they have been able to properly manage them back to health.
“The signal are not very encouraging for the future of the bank. It is likely to be taken over by another bank in the future. The most important thing is that depositors’ funds are protected. The most important thing for us at the capital market also is that shareholders’ funds are protected.”
An analyst at Afrinvest West Africa Limited, Mr. Ebo Ayodeji, commended the CBN for the action, but said that more needed to be disclosed to the public about the true position of the bank.