Nigerians react after CBN takeover of Skye Bank

Financial experts and shareholders on Saturday expressed mixed reactions over the decision of the Central Bank of Nigeria (CBN) to revoke the licence of Skye Bank.

The stakeholders expressed their views in separate interviews with the News Agency of Nigeria (NAN) in Lagos, while reacting to the revocation of the licence of Skye Bank by the apex bank.

Sheriffdeen Tella of the Economics department, Olabisi Onabanjo University Ago-Iwoye, Ogun commended the decision of the apex bank.

Mr Tella said the CBN had helped Skye Bank shareholders by making the announcement at the close of banking hour for the week.

He said the announcement at the close of the week prevented an immediate run on the bank.

According to him, announcement of a buyer was also helpful and would prevent a run on the bank in the coming week.

“There is no time that can be regarded as good for this kind of action but action must be taken whenever it becomes inevitable.

“Such actions are capable of dousing tension that normally follows sudden closure of banks,” Mr Tella said.

He said the shareholders had not really benefited from the bank because they had not received dividend on their investment for a long time.

The economist said in other climes where shareholders were active investors, they would have sold their shares to minimise losses.

“But in Nigeria, majority hold on to their shares even when it is apparent the business is sliding down,” Mr Tella added.

He, however, said the impact on the economy and the banking sector in particular may not be serious, unless another bank ran into trouble within three to six months.

Garba Kurfi, the managing director, APT Securities and Funds Ltd., the decision of the apex bank as a regulator could not be faulted.

Mr Kurfi said the development should serve as a lesson to both the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) to put their house in order.

He noted that SEC and NSE should be more active going forward by ensuring suspension of trading on the shares of any bank taken over by CBN to avoid making mockery of the capital market.

He said Skye Bank shares traded on the exchange on Sept. 21 and made some gains only for the licence to be revoked the same day.

“CBN has been demonstrating several times that it has no regards for shareholders but only depositors and as at today the only loser in the bank are the shareholders,” Mr Kurfi said.

He said the shareholders should learn from past experience by exiting any bank taken over by the CBN to avoid regrets.

Uche Nworah, the general manager, Anambra Broadcasting Service, Awka, said the mandate of the apex bank and the Nigeria Deposit Insurance Corporation (NDIC) was to safeguard depositors.

Mr Nworah said the CBN must have seen a lot of things in the bank before deciding to revoke the licence to protect investors and depositors.

He, however, faulted the apex bank’s approach in terms of information management.

Mr Nworah said the bank’s customers and depositors were the ones that alerted the workers of what was going on in Awka, Anambra State.

Moses Igbrude, publicity secretary, Independent Shareholders Association of Nigeria, said the takeover of Skye Bank was a very sad and avoidable story.

Mr Igbrude described the takeover as a total loss for all the bank’s minority shareholders.

He linked the bank’s failure to the acquisition of the former Afribank against the shareholders advice.

“The story started some few years ago when the former management decided to expand by acquiring former Afribank and later Mainstream Bank against the advice of some of us shareholders not to do so.

“They refused to listen to us when we told them that Mainstream Bank was cancerous and political exposed, that the intrigue that would follow the acquisition would consume the bank.

“While shareholders of Skye Bank have lost their investments, what happened to the management who took the decision and those professional consultants who did the due diligence reports that the management rely on to take decision?

“It is high time regulators address the issue fake consultants who parade themselves as professionals or else this will continue to happen,” Mr Igbrude said.

Boniface Okezie, national coordinator, Progressive Shareholders Association of Nigeria, said the CBN needed to explain its actions to Nigerians for better understanding.

Mr Okezie said the apex bank needed to find a lasting solution to the banking sector crisis which was becoming an embarrassment not only to government but to the investing public.

He said the CBN should be held responsible for the development in Skye Bank because it granted the bank the approval to acquire Afribank.

Mr Okezie said the investors should not be allowed to suffer again for the misdeeds and mistakes of the regulations.

He called on the Federal Government to investigate the incessant fall of banks in the country.

Mr Okezie added that the past management and board of Skye Bank must be made to account of what led to the bank’s misfortune. (NAN)

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