Godwin-Emefiele CBN

The Central Bank of Nigeria dissolved the board and management of SKYE Bank PLC on Monday.

The dissolution followed the voluntary resignation by the chairman of the bank’s Board, all other non-executive directors, the Independent Director, the Managing Director, the Deputy Managing Director and two longest serving Executive Directors,

In their place, the CBN selected industry experts whom it believed could turn the bank around.

The CBN selected Alhaji M. K. Ahmad to be the new Chairman, while Mr. Adetokunbo Abiru would be the new Managing Director.

The more recent executive directors will be allowed to remain to ensure continuity and a smooth transition.

Ahmad is a seasoned public sector executive with over 35 years of distinguished experience spanning the public sector and the financial services industry.

He served as the pioneer Director-General and Chief Executive Officer of the National Pensions Commission.

He was also a pioneer staff of the Nigeria Deposit Insurance Company where he rose to become a Director.

He also served on the board of various companies and committees including banks and not-for-profit organisations.

Similarly, Mr. Abiru is a seasoned accountant and banker and was until recently an Executive Director at First Bank PLC.

He was also Lagos State Commissioner for Finance from 2011 to 2013.

Mr. Abiru is a Fellow of the Institute of Chartered Accountants of Nigeria.

The CBN said in a statement issued on Monday and signed by its Acting Director, Corporate Communications, Isaac Okorafor, that “Skye Bank is not in distress and remains a healthy bank in the system.’’

It assured depositors, shareholders and all relevant stakeholders that there was no reason for concern or panic as it sought their continued cooperation at this time.

Okorafor stated that “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.’’

This, he stated, had culminated in the bank’s permanent presence at the CBN Lending Window.

He added that “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.’’

He explained that in spite of the expectation of relevant regulators, market watchers, financial analysts and interested stakeholders that Skye Bank should be doing much better than it was, the CBN recorded the exact opposite to reality.

Okorafor stressed: “given the aforementioned issues and the fact that Skye Bank is a Domestic Systematically Important Bank 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.

“In view of the long grace period allowed the bank to correct the situation, we came to the conclusion that, although the existing board had done its best to steer the ship it had come to a realisation that it would be unable to bring the bank out of its present precarious situation.

“Fortunately, and in the overall interest of the bank, the Chairman and some board members have decided to resign their appointments from the bank.’’

Author: Cerebral Lemon