Nigerian Regulator Extends Loan to Skye Bank for Liquidity

  • Regulator provides ‘short-term lending facility’ to lender
  • Central bank says that there’s no plan to sell Skye Bank

Nigeria’s central bank provided a loan to Skye Bank Plc to boost its liquidity after the lender breached requirements on capital and lending.

The short-term lending facility will allow new management to “ensure that some withdrawals it suffered in the wake of the undue panic of last week do not adversely affect its operations,’’ Isaac Okorafor, a spokesman for the Abuja-based Central Bank of Nigeria, said in an e-mailed response to questions. The regulator has also issued guarantees to the bank’s depositors and creditors as a demonstration of its health, he said.

The central bank replaced top managers of Skye Bank earlier this month after it breached required thresholds for liquidity and non-performing loans. While the regulator moved to calm markets, saying Skye and the industry remained healthy, the stock plunged to record lows, leading declines among other Nigerian lenders.

The shares rose for the fourth straight day, gaining 9 percent to 85 kobo at 12.05 p.m. in Lagos trading, the best performer on the 171-member Nigerian Stock Exchange All-Share Index. Almost 53 million shares were traded, more than three times the three-month average. It has declined by 46 percent this year, compared with a 1.8 percent retreat by the Nigerian All Share Index.

The central bank said it has no plan to sell Skye Bank.

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