By Odunewu Segun
Despite assurances from the Central Bank of Nigeria that no commercial banks in the country is in distress following the takeover of Skye Bank earlier this week, analysts believe the stock market is set for a massive sell-off as the fear of the financial state of banks sends chills down the spine of investors.
The apex bank denied what it called “malicious rumors and unfounded speculations” that some banks in the country are in distress or may be in the process of doing so. “Neither Skye Bank nor any other bank in the industry is in distress,” it said in a statement signed by Isaac Okorafor, its Acting Director, Corporate Communications.
Skye Bank and the Central Bank announced that the management of the former had agreed to “step- down” paving the way for a new board and management selected by the Central Bank. The question on everyone’s mind now is how bad is Skye Bank’s results? And more importantly, is this the only bank that is in trouble?
National Daily gathered other banks in the country are also in similar strait like Skye Bank, especially in the areas of number of bad loans by commercial banks at the end of the 2015 Annual report. The impact these loans have on the capital adequacy ratios of some banks is quite worrisome especially as the country faces up to recession. Businesses are suffering under a 45% depreciation in the exchange rate, scarcity of forex, rising inflation and lover government and consumer spending.
It is expected that investors will be looking closely at results of companies in the Manufacturing, Oil and Gas, Industrials and Consumer goods sector to see how they fare when their results start to trickle in next week. All eyes will also be on Macro-economic indices such as the inflation rate, jobs report all expected later in July.
As a result of the uncertainty in the economy, lot of investor could dovetail into a major sell-off from today, when the NSE resume from the 3-days public holiday.