Skye Bank shares slump as investors raises concern over future

Shares of Skye Bank Plc fell to a record low, hitting the floor price set by the Nigerian Stock Exchange, as investors fretted about the lender’s future in the face of rising bad debts and a shrinking economy.

The stock slid 3.9 percent to 50 kobo as of 1:16 p.m. in Lagos, Nigeria’s commercial capital. That extended declines this year to 68 percent, the worst performer in the 171-member NSE All Share Index after Forte Oil Plc.

Skye Bank, which had its management replaced by the central bank in July, is planning to sell majority stakes in its units in Gambia, Guinea and Sierra Leone to ease pressures on its capital, people familiar with the matter said last week.

By selling the businesses, Skye would no longer need to maintain a capital adequacy ratio of 15 percent as it will become a national bank that only needs a CAR ratio of 10 percent. The lender, which hasn’t released earnings for the first half, had a CAR of 12 percent at the end of 2015.

“Nobody really knows how challenging its financials are,” Olubunmi Asaolu, a banking analyst at Lagos-based FBNQuest, said by phone. “If somehow, something positive comes out in the company’s quarterly results, and they have a positive story on how they can turn the bank around, there could be a change.”