ABUJA-THE Central Bank of Nigeria on Monday wielded the big stick by replacing some key members of the Board of Directors and management team of Skye Bank Plc, saying its findings revealed that the bank had fallen short of the minimum thresholds in critical prudential and capital adequacy ratios.

As a result, the chairman, managing director, deputy managing director, all non-executive directors and the two longest-serving executive directors on the board and management team of Skye Bank were replaced by the central bank.

The CBN Governor, Mr. Godwin Emefiele, told a news conference in Lagos on Monday that the “proactive moves have become unavoidable in view of the persistent failure of Skye Bank to meet minimum thresholds in critical prudential and adequacy ratios, which has culminated in the bank’s permanent presence at the CBN lending window.”

Godwin Emefiele, CBN Gov

He said in the overall interest of the bank, its chairman, Olatunde Ayeni; managing director, Timothy Oguntayo; deputy managing director, Mrs. Amaka Onwughalu; and executive directors, Mr. Dotun Adeniyi and Mrs. Ibiye Ekong, had voluntarily resigned their appointments ahead of the CBN action.

The affected non-executive directors are Mr. Victor Odozi, Mr. Babajide Agbabiaka, Dr. Jason Fadeyi, Mr. Kunle Aluko, Mr. Victor Adenigbagbe, Mr. Abdul Bello and Hajiya Amunna Lawan Ali.

In their place, the governor said the CBN had selected industry experts and people of high integrity whom it believed could turn the bank around.

In this regard, Emefiele announced Alhaji Muhammad Ahmad as the new chairman of Skye Bank, while Mr. Adetokunbo Abiru was also named as the new managing director.

According to a statement by Skye Bank, other members of the reconstituted board are Bayo Sanni, Idris Yakubu, Markie Idowu and Abimbola Izu, all of who had been serving as executive directors of the lender before now.

The CBN governor noted that the more recent executive directors in Skye Bank would be allowed to remain to ensure continuity and a smooth transition.

According to him, the new members of the board and management team of Skye Bank have the sole responsibility of ensuring the speedy restoration of the health of the lender.

The CBN helmsman noted that the changes were with immediate effect.

Giving further reasons for its regulatory action on Skye Bank, Emefiele argued that the CBN would be failing in its duties if the situation of the bank was allowed to degenerate before taking such an action.

While maintaining that Skye Bank was not in distress, he noted that neither depositors nor shareholders’ funds had been eroded.

Emefiele said the action was taken to avoid a situation where shareholders or depositors’ funds would be affected.

He urged the general public and customers of the bank to conduct their business with Skye Bank, just like any other bank, saying their deposits were safe and intact.

Giving further details on the health of Skye Bank, Emefiele said, “The most important issues in banks are non-performing loans, capital adequacy ratio and liquidity ratio. What we have since late 2014 to 2016 is that the prudential and adequacy ratio of Skye Bank has been weakening.

“We thought it was not right for us to allow this to continue to the point that it gets irreversible. That is why we took this action to nip it in the bud. It has nothing to do with being in distress. We do not want the liquidity and adequacy ratio of the bank to worsen to the point that depositors’ funds get into risk. The board itself has come to the realisation that they have done their best and it is about the time that they bowed out so that a new team can come in to run the bank in order to improve its position.

“Naturally, what you have seen is that by the time the capital is recomputed and revalued, there is a sort of weakening in value, but it has not eroded the capitalisation and value of the bank. We are hoping that as the new team comes up, the value will definitely improve.”

On whether the CBN would take the same action on other banks demonstrating similar problems, the CBN governor said, “The strategic health of the banking industry remains sound. And where there is a need to inform the general public about the strategic health of a bank, we will do it. I want to assure everybody that the strategic health of the industry is still good.

“No doubt, as a result of the global shock, there is weakening in certain ratios of the banks; but then, those ratios have not weakened to the point where we can say the industry is distressed. We are appealing to all depositors to be calm.

“There is no need to leave an impression that any bank is distressed. We at the CBN and the NDIC have held discussions, and I want to assure you that no deposit is at risk. Customers should continue to do their business the way they have been conducting in all the banks. No depositors will lose their money. SEC and other concerned regulators have been informed of this development.”

Emefiele added, “It is important to reiterate the fact that 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 as we seek their continued cooperation at this time.

“It is our expectation that the shareholders and remaining executive directors will work seamlessly with the new team to ensure that the fortunes of the bank are restored in the shortest time possible.”

Emefiele recalled that the CBN had held several meetings with the management and board of Skye Bank as part of its strategy of close engagement whenever a bank’s financial or governance situation posed potential threats to the overall stability of the financial system.

He said that despite the expectation of relevant regulators, market watchers, financial analysts and interested stakeholders that Skye Bank should be doing much better than it was, the opposite had been the case.

However, anxious customers besieged branches of the bank in different locations across the country to make withdrawals from their accounts, explaining that they were not sure if their money was safe with the lender.

Ahmad, the new chairman of Skye Bank, was the pioneer Director-General and Chief Executive Officer of the National Pension Commission.

He was also a pioneer employee of the Nigeria Deposit Insurance Corporation where he rose to become a director. He has also served on the board of various companies and committees, including banks and not-for-profit organisations.

Abiru, the new MD, is a seasoned accountant and banker, and was until recently an executive director in First Bank Plc. He is also a former Commissioner for Finance in Lagos State from 2011 to 2013.

Meanwhile, the share price of Skye Bank plunged by N0.10 (9.52 per cent) to close at N0.95 from N1.05 as investors dumped their holdings of the shares of the bank as news of the CBN action filtered in on Monday.

The bank was top on the list of 31 firms that recorded losses in their share prices.

These losses resulted in the Nigerian Stock Exchange’s market capitalisation shedding N104bn to close at N9.960tn from N10.064tn.

The new chairman of the bank, Ahmad, was quoted in a statement on Monday as expressing optimism about the lender, given its vast potential and strategic position in the economy.

A renowned economist and the Chief Executive Officer, Financial Derivatives Limited, Mr. Bismarck Rewane, said, “The CBN has intervened by changing the board of the bank, but the ownership remains the same; it is a quoted bank. Now, time will be given to recapitalise the bank and support it so that it is not under pressure.”

Asked what the implications would be for the banking industry, he said, “To be honest with you, not much. It means that banks that are insolvent will need to capitalise within a period. It is early days; let’s just say that the regulator is now beginning to shift emphasis from monetary policy to banks’ systemic stability.

“The new managers are very rounded and solid. I know M. K. Ahmad; he is an excellent man. He worked at the NDIC. He was the head of PenCom. The other man, Mr. Abiru, has been a commissioner and worked in First Bank. Again, I don’t think it will affect the banking system detrimentally.”

The Head of Research and Investment Advisory at SCM Capital Limited, Mr. Sewa Wusu, noted that the CBN had recently said three banks had yet to comply with the capital adequacy ratio and that a period of time was given to them to measure up.

He said, “It has been long we witnessed an action of such a nature. The last time we witnessed that was when the CBN actually took over three banks and coincidentally, one of them, Mainstreet Bank, was acquired by Skye Bank.

PUNCH-