- Lender drops for seventh straight day after management ousted
- Nation’s banking shares extend losses on contagion concerns
Skye Bank Plc, the Nigerian lender whose top management was replaced by regulators, fell to a record low as the stock headed for a threshold that will prevent it sliding any further.
The Lagos-based company slid for a seventh day, declining 1.6 percent to 60 kobo, heading closer to the 50 kobo limit that no Nigerian equity can trade below. That extended losses to 43 percent since the trading session before Central Bank of Nigeria announced on July 4 that it replaced Skye’s chief executive officer, chairman and 10 other directors. The steps were necessary after the lender breached requirements on liquidity and non-performing loans, the regulator said.
“I don’t see why Skye Bank should be trading at these distressed levels,” said Pabina Yinkere, an equity analyst at Lagos-based Vetiva Capital Management Ltd. “When investors come to realize that the bank is not as bad as the reaction that followed the central bank action, the stock will regain attraction.’’
Skye is the worst performer on the 171-member Nigerian Stock Exchange All-Share Index since the central bank intervention. While the central bank moved to calm markets, saying in a statement on July 6 that Skye and the rest of the industry remained healthy, investors have continued to dump almost all banking shares on concerns of contagion.
Diamond Bank Plc dropped 1.6 percent to extend losses over the past two weeks to 22 percent. Atlas Mara Plc’s Union Bank Nigeria and Fidelity Bank Nigeria Plc have retreated by 12 percent.