Banking
Skye Bank On Edge Of Total Collapse?
By Dipo Olowookere
It is no doubt that since the Central Bank of Nigeria (CBN) changed the leadership of Skye Bank some weeks ago, the bank has not remained the same again.
Skye Bank and CBN have had to assured depositors and the general public that all is well, trying every possible means to allay the fears of people, especially depositors.
Also, the Lagos State government, which uses the bank for collection of different levies, including for tax collection and payment of workers’ salaries, has also said the bank is healthy. In fact, it told civil servants under its payroll not to close their accounts with the bank.
Vanguard takes a look at the issue and below was what the respected newspaper said on the issue.
Why CBN and Lagos state might fail to save Skye Bank
“SKYE Bank is not distressed.” CBN advert in several newspapers.
The Central Bank of Nigeria, CBN, and the Lagos State government have different reasons for desperately averting possible Skye Bank distress. Even the hint of likely distress inhibiting deposits and inviting a run on the bank is not in their interests. For the CBN, the collapse of any bank, at this time, is likely to create collateral damage affecting other banks, governments, the organized private sector and the financial system. So their anxiety on this matter is understandable.
Before the CBN advertisement, the Permanent Secretary, Lagos State Ministry of Finance was reported to have told Lagos State employees not to close their accounts with Skye bank.
The report was not clear whether what was issued was an order, a plea, or advice. None of them is without its perils for all concerned – Lagos State, the bank and the employees.
It is questionable if an employer, even a government can issue instructions to its employees regarding the bank to patronize after paying them.
While it might be acceptable for administrative reasons to request all employees to open accounts with a bank for salary transfers, it is doubtful if the state can force the civil servants to keep their money in the designated bank and risk their funds going down in case of distress.
Who then will suffer the consequences?
Advice, the public servants definitely don’t need especially when only the state’s and the bank’s interests will be served by compliance. SKYE bank certainly needs all the deposits it can get – more than ever before.
The state being a major shareholder in the bank also needs the bank to recover the confidence of other stakeholders in order to survive and perhaps improve its performance.
Depositors, including the staff of Lagos state, however, need a different sort of counsel. They need to be honestly informed about the real situation of the bank.
The CBN does not, without reason, order the change of directors and management of a bank unless a lot of things have gone wrong and some individuals charged with the management of the bank were involved – deliberately or inadvertently.
More perplexity is introduced by the fact that the directors and managers removed will apparently walk away without sanctions for putting every other stakeholder at risk.
Hundreds of thousands of depositors of SAVANNAH Bank and SOCIETE GENERALE Bank are still holding to empty air more than ten years after those banks were closed without previous warning from the CBN.
OCEANIC, INTERCONTINENTAL, BANKPHB etc were presented to the public as still strong banks until Sanusi replaced Soludo who helped to keep up the fiction of soundness.
So, why should depositors rely on a CBN which had failed them repeatedly and made them to pay dearly for it? To be quite candid, the last organization to declare a bank distressed is the CBN. Usually by then the depositors have been taken to the cleaners and their funds irretrievably lost.
Lagos state has its own problems with regard to SKYE Bank. Its shares in the bank, which sold for N17.50 per share in October 2008, are now going begging at 65 kobo per share.
The state has lost hundreds of millions of naira on that investment.
The quantum of loss is one of the most closely guarded secrets of the progressive governments since “Con-Soludo-tion” imposed by the CBN under Professor Soludo.
There is no shareholder alive who was not a victim of the calamity called “Con-Soludo-tion”. Lagos State is one of the biggest victims of the rush to acquire shares under “Con-Soludo-tion”, and it is understandable why the current government is eager to minimize the losses.
But, the truth remains. A grave mistake had been made; an error of judgment committed at the topmost levels of government.
As Agathon, 447-401 B.C, has reminded us, “Even God cannot change the past.” Lagos State is unlikely to recover those investments even if Ambode serves a second term.
The statement issued by the Perm Sec, if followed by public servants in the state, carries with it the risk that the state’s funds, now largely lost, will be followed down the drain by those of its staff – if anything goes wrong with SKYE Bank.
That would amount to a great disservice to the workers who were not consulted when the Governor who committed the state took the decision – admittedly in good faith.
But, such is life. There is always a lot of risk in banking. If there is none, everybody will be in banking. There is also a lot of risk in shareholding. If not, everybody will be in that venture too. In Nigeria, the combination of the two had almost always proved painful for a lot of people – except the insiders and manipulators who invariably walk away free. To some extent the reason Nigerian banking appears to be perpetually embroiled in crisis can be traced to our very lax laws which allow directors of banks to get away with their larcenies.
Until we stiffen the penalties for contraventions of banking rules, the nation will reel from one crisis to another.
Finally, it is curious that while others are desperately working to save the bank, its own directors are doing nothing. They are not reaching out to public opinion molders to present their plans for restoration of the bank.
http://www.vanguardngr.com/2016/08/cbn-lagos-state-might-fail-save-skye-bank/
By Modupe Gbadeyanka
About N3.6 trillion has been repaid to the Central Bank of Nigeria (CBN) by the Asset Management Corporation of Nigeria (AMCON) since its inception in 2010.
This information was revealed by the chief executive of AMCON, Mr Gbenga Alade, during a media parley to update the press on the activities of the agency.
Mr Alade said at the moment, the organisation still owes the central bank about N3 trillion for toxic assets of banks in the country.
He praised the organisation for its asset recovery drive, stressing that when compared with others across the world, Nigeria has done well.
“It is important to stress that the corporation has done tremendously well, especially when compared to other notable government-owned Asset Management Corporations around the world.
“Based on the balance at purchase, AMCON outperformed other Asset Management Corporations all over the world by achieving over 87 per cent in recoveries despite the unique challenges associated with debt recovery in Nigeria.
“The Malaysian Danaharta, which is adjudged one of the best performing Asset Management Corporation’s, only achieved 58 per cent. The Chinese Asset Management Corporation, despite its stricter laws, achieved just 33 per cent.
“Only the Korean Asset Management Corporation (KAMCO), South Korea, has achieved more recoveries than AMCON, with about 100 per cent. This was due to their brute force with which they chased the obligors.
“Despite KAMCO’s recovery records, the agency is still operational to date with slight realignments in its mandate.
“Other noted Asset Management Corporations that have transitioned into a perpetual institution of the various governments include, China Asset Management Company, Federal Deposit Insurance Corporation (FDIC) USA, and KFW Germany.
“So, gentlemen, without sounding immodest, AMCON has done well, and we will not relent until all the outstanding debts are fully realized,” Mr Alade stated.
On the financial performance of AMCON, he said last year, the firm posted a revenue of N156.25 billion and operating expenses of N29.04 billion, while for the 2025 fiscal year should be a revenue of N215.15 billion and operating expenses of N29.06 billion.
By Modupe Gbadeyanka
One of the non-interest banks in Nigeria, The Alternative Bank (AltBank), has opened a new branch in Effurun, Delta State.
The new office will serve the Edo-Delta region and provide purposeful banking and real financial empowerment for individuals, entrepreneurs, and businesses, a statement from the firm stated.
The lender disclosed that the Effurun branch is a bold move in its mission to reshape banking in Nigeria.
The launch was graced by key dignitaries, including the Ovie of Uvwie Kingdom, Emmanuel Ekemejewa Sideso Abe I; the Chairman of Uvwie Local Government, Anthony O. Ofoni, represented his vice, Andrew Agagbo; and the Special Adviser to the Governor of Delta State on Community Development, Mr Ernest Airoboyi; amongst others.
The Divisional Head for South at The Alternative Bank, Mr Chukwuemeka Agada, emphasised the institution’s commitment to Warri and its surrounding communities.
“By establishing a presence here, we are initiating a transformation in the way banking serves the people of Delta. Our purpose-driven approach ensures that customers’ financial goals are not just met but exceeded,” he stated.
“This branch represents our pledge to empower Warri’s dynamic businesses and families, providing them with the tools to grow without compromise,” Mr Agada added.
“We understand the heartbeat of this community, and we are excited to integrate our bank into the fabric of this dynamic region,” he stated further.
On his part, the representative of the Ovie, Mr Samuel Eshenake, challenged the bank to facilitate development and employment within the Effurun community.
The Regional Head for Edo/Delta at The Alternative Bank, Mr Akanni Owolabi, embraced this challenge, pledging that the bank will work sustainably to drive local commerce.
“At The Alternative Bank, we are committed to being an active partner in the development of Effurun. We see this branch as a catalyst for creating opportunities, driving employment, and supporting the growth of local businesses.
“Our mission is to empower this community, ensuring that every step forward is one of progress, prosperity, and shared success.”
By Aduragbemi Omiyale
A partnership aimed to enable seamless, real-time and secure transactions for cardholders across Africa and the rest of the world has been entered into by Payattitude and PAPSSCARD, the card scheme initiative of the Pan-African Payment & Settlement System (PAPSS).
The collaboration will allow Payattitude cards issued by banks and other deposit-taking institutions to be co-branded with PAPSSCARD, Discover, Diners and Pulse for acceptance across their networks in Nigeria, Africa and worldwide.
As an initiative of the African Export-Import Bank (Afreximbank) and a key financial infrastructure supporting the African Continental Free Trade Area (AfCFTA), the PAPSSCARD scheme will facilitate instant cross-border payments in local currencies.
“This partnership reflects our commitment to cross-enterprise alliances and enabling inclusive, efficient, and borderless payments across Africa and the world
“With Payattitude, Nigerian cardholders and financial institutions can now enjoy the benefits of a Nigerian card that can be used worldwide,” a director at Payattitude, Dr Agada Apochi, said.
The acting chief executive of PAPSSCARD, Mr John Bosco Sebabi, said the aim is “to connect African payment ecosystems, reduce the cost and inefficiencies of cross-border payments, and strengthen African sovereignty over payments infrastructure.
“Collaborating with Payattitude, a key innovator in Nigeria’s payment space, represents a significant step towards a more unified African payment landscape.”
The chief executive of PAPSS, Mr Mike Ogbalu, said, “By bringing together PAPSSCARD’s robust cross-border payment capabilities with Payattitude’s leadership in the Nigerian digital payments, we are taking tangible steps toward building a single African market where individuals and businesses can transact easily and securely, both within and beyond Africa.”
Payattitude is the first-in-kind Nigerian Payment Scheme to pioneer multibank App and USSD Code *569#.
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