Monday, September 8, 2025
25.4 C
Lagos

S&P Issues Red Alert on Nigerian Banking Sector

US rating agency, Standard & Poors revised its counter-party credit ratings for Skye Bank.
The new analysis released on July 12, 2016, lowers the ratings of the banking group to CCC- on the long term and C on the short term.
S&P’s decision occurred after the Central Bank indicated that the bank failed to meet requirements of its regulatory prudential ratios.
In this context, Skye Bank’s Board and Management have been revoked; however there is still no clear plan as to how the bank will turn around.
The situation, according to S&P, should worsen the bank’s inability to pay its short-term debt and lead to default in the next six months.
Now, observers fear a domino effect in the Nigerian finance chain. In March 2016, S&P issued a negative outlook for six other local banks.
This fear is not shared by all as some believe that the regulator should have been more accommodating to the sector which is facing lots of troubles. Others welcome the Central Bank’s decision, saying it should put some order in the sector.
On the Nigerian Stock Exchange where it is listed, investors did not wait and Skye Bank’s share plunged 72% since its 12-month peak on 1 September, 2015 (N2.67). On July 13, it traded at 70 kobo (N0.70) after dropping by about 30% since Monday.
This is its lowest level since 2006, according to data provided by Bloomberg.
—Idriss Linge

spot_img
spot_img

Hot this week

Nigeria, Brazil Central Banks Deepen Economic, Financial Co-operation

Nigeria’s Central Bank Governor, Olayemi Cardoso, has held talks...

Ecobank Nigeria to Host Second Edition of Design & Build, Showcasing Premier Innovators in Design, Construction

Ecobank Nigeria, a subsidiary of the leading pan-African banking...

Expert: Fintech, Financial Inclusion Critical for Sustainable Growth of Nigerian Economy

A renowned economist, Dr. Biodun Adedipe, the Chief Consultant/CEO,...

Sterling Bank Marks One Year of Africa’s Groundbreaking Core Banking System

Number one Best Workplace in Banking in Nigeria and...

Topics

Trane Appoints JMG as New Distributor in Nigeria

Trane, a global provider of indoor comfort systems and...

African Dining Hall, Food Pavilions to Feed Children at Expo 2020 Dubai

Kids visiting the on-going Expo 2020 Dubai are entitled...

Africa Power Vision Plans to Electrify 80% of Households by 2040

Africa’s electrification recently welcomed a new advocate, Africa Power...

MTN Money Transfer Active in Rwanda, Uganda, Zambia

International money transfer website WorldRemit and MTN have signed...

Root Capital, The MasterCard Foundation to Raise Income for 300,000 Farmers in West Africa

Impact investing pioneer, Root Capital announced at the African...

African Power Sector Outlook Optimistic: PwC

Power utility companies and stakeholders across Africa anticipate a brighter and different outlook for the sector in the decade ahead, according to a new report from PwC. Fifty one senior power and utility sector executives from 15 African countries took part in PwC’s Africa power & utilities survey. They report continued concern about some of the immediate risks to the power system, but are also optimistic about the longer term prospects for electricity in Africa.

Equities Market Sustains Gains… NSE ASI up 1.74%

The local bourse opened the week sustaining the positive momentum...

‘Coding for Sustainably’ Ends amidst Applause from Parents, Other Stakeholders

L-R Tobi Akinloye Instructor, Osas Osaigbovo Community Manager, Olufunke...
spot_img

Related Articles

Popular Categories

spot_imgspot_img