BREAKING: CBN Sacks Skye Bank Chairman, Appoints New Board Chairman

Nigeria’s central bank sacked top executives of Skye Bank over capital adequacy issues, a source said on Monday.

Chief executive Timothy Oguntayo, who led Skye Bank to acquire nationalised lender Mainstreet Bank in 2014, resigned before a central bank announcement due later.

The regulator last year gave three commercial banks until June 2016 to recapitalise after they failed to hit a minimum capital adequacy rate of 10%.

“It’s about capital adequacy,” the source said.

Skye Bank and Nigeria’s central bank declined to comment.

Skye Bank is designated as one of Nigeria’s “systemically important” banks due to the size of total sector deposits it holds after the acquisition of Mainstreet Bank. This means it has to hold a higher amount of capital.

Shares in Skye fell 9.5% to 0.95 naira.

The lender has been in talks with shareholders and new investors to raise 30 billion naira (about $150m) after it suspended plans for a rights issue last year due to weak market conditions.

Governor of the apex bank, Godwin Emiefiele in a press briefing on Monday made the announcement after confirming the resignation of the former CEO, Timothy Oguntayo.

Emiefiele disclosed that Skye Bank carries quite some huge bad assets that saw the Non-Performing Loans exceeding the allowed 5 percent threshold.

The apex bank had earlier dissolved the board of the Skye Bank in a move aimed at avoiding a total collapse of the financial institution.

The bank is believed to have an estimated non-performing loan portfolio of N700 billion due to its overexposure in the oil and gas sector.

All the directors and executives at the bank, but for three executives who joined the bank last year, have been shown the way out.