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Nigeria's Central Bank takes over Skye Bank, customers panic

Nigeria's Central Bank takes over Skye Bank, customers panic

Nigeria

<p>The Central Bank of Nigeria (<span class="caps">CBN</span>) on Monday announced the takeover of a local bank, Skye Bank, citing ‘‘persistent failure of Skye Bank <span class="caps">PLC</span> to meet minimum thresholds in critical prudential and adequacy ratios.’‘</p> <p>According to the apex bank, taking over Skye bank was unavoidable also because it’s failures had resulted in the bank’s permanent presence at the <span class="caps">CBN</span>’s Lending Window.</p> <p>The announcement by the <span class="caps">CBN</span> created near panic as clients of the bank trooped to branches to withdraw their savings for fear of losing their monies. </p> <blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">Bank Customers no dey smile.<br /> they besieged Skye bank after news broke out that <span class="caps">CBN</span> has fired top management. <a href="https://t.co/Ui2WgORs8b">pic.twitter.com/Ui2WgORs8b</a></p>— gwenshuga1 (@gwenshuga) <a href="https://twitter.com/gwenshuga/status/749992790348730368">July 4, 2016</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <p>The Central Bank and Skye, both allayed any such fears because according to the <span class="caps">CBN</span>, ‘‘Skye Bank is not in distress and remains a healthy bank in the system. The <span class="caps">CBN</span> hereby assures depositors, shareholders and all relevant stakeholders that there is no reason for concern or panic as we seek their continued cooperation at this time.’‘</p> <blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">9.<a href="https://twitter.com/hashtag/SkyeBank?src=hash">#SkyeBank</a> <a href="https://twitter.com/hashtag/CBN?src=hash">#CBN</a> restates that Skye Bank is not in distress and remains a healthy bank in the system</p>— Central Bank Nigeria (@cenbank) <a href="https://twitter.com/cenbank/status/750012858747027456">July 4, 2016</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">10.<a href="https://twitter.com/hashtag/SkyeBank?src=hash">#SkyeBank</a> <a href="https://twitter.com/hashtag/CBN?src=hash">#CBN</a> assures depositors, shareholders and all relevant stakeholders that there is no reason for concern or panic</p>— Central Bank Nigeria (@cenbank) <a href="https://twitter.com/cenbank/status/750013110468108292">July 4, 2016</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <p>Preceding the takeover however, the Chairman of the bank’s board, the Managing Director and other top ranking officials of the bank tendered in their resignations with immediate effect.</p> <p>The <span class="caps">CBN</span> subsequently replaced the board and management teams of the bank in a bid to steer the bank from any issues going forward. </p> <p>According to a <span class="caps">CBN</span> statement on the takeover, ‘‘It will be recalled that the medium-term vision of the <span class="caps">CBN</span>, which was unveiled in June 2014, indicated that the bank would proactively manage potential threats to financial stability, maintain zero tolerance on practices that undermine the health of financial institutions, and create a strong governance regime that is conducive for financial intermediation, innovative finance and inclusiveness. </p> <p>‘‘It is in furtherance of these commitments that the <span class="caps">CBN</span> has made the changes and assures the incoming Board and Management of its unflinching support during this transition period,’‘ the statement added.</p>

Skye Bank is not in distress and remains a healthy bank in the system. The CBN hereby assures depositors, shareholders and all relevant stakeholders that there is no reason for concern or panic.

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