CBN Insists No Bank Is In Distress
A half of the banking industry stocks lost values at the resumption of economic activities last Friday, with some remaining stagnant, while only four gained marginally.

Investors were apprehensive over their stocks priced in their valuations, because of speculations on which bank is next after Skye Bank over alleged comments from a top regulatory source that two more banks have breached the prudential ratios.

This is coming on the heels of the removal of board and management team of Skye Bank over breach of prudential limits— liquidity, capital adequacy and non-performing loans ratios.

The banking sector has been under pressure due to slowing economic growth, with average loan-book exposure to oil and gas of 30 percent faltering. The development, wherein Skye Bank was adjudged particularly weaker than others, was also aggravated by the implementation of Treasury Single Account (TSA), which sterilised cheap public fund from the industry

Meanwhile, the Central Bank of Nigeria (CBN) has dismissed the speculations making the rounds that some banks have either gone or may be going into distress. The apex bank described it as not only “malicious rumours,” but also unfounded.

According to Mr. Isaac Okoroafor, Acting Director of Corporate Communications, CBN is reiterating in the strongest terms that these rumours and speculations are untrue and do not reflect the actual health of the individual banks and, indeed, the entire banking industry.

“For the avoidance of doubt, the infusion of a new Board and Management for Skye Bank Plc is a proactive regulatory action meant to ensure that the bank does not continue to fail in its relevant prudential ratios.

“Neither Skye Bank nor any other bank in the industry is in distressed. Therefore, the CBN would like to request the general public to ignore speculations or rumours to the contrary, as they could only be the handiwork of mischief makers who do not mean well for the Nigerian banking system and its economy.