Skye Bank May Sell Subsidiaries to Shore Up Capital

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LAGOS, NOVEMBER 23, 2016 – Indications have emerged that Skye Bank may sell some or all of its local and foreign subsidiaries as part of a review aimed at streamlining operations and boosting its capital adequacy, its chief financial officer, Pius Olaoye, has revealed.

The Nigerian central bank shored up Skye Bank in July with a more than 100 billion naira ($329 million) capital injection, after sacking its top management for failing to meet minimum capital requirements. It then appointed a new management team.

Olaoye on Tuesday, November 22, said that the bank would sell subsidiaries if the pricing was right and has appointed advisers to help find buyers. Skye, which holds an international bank license, has three subsidiaries in West Africa and 10 non-bank subsidiaries.

“We’re looking at the various outlets that we have and some of those foreign subsidiaries are part of it. If we get good offers we will consider selling them off,” Olaoye told Reuters in a phone interview.

“If we get good offers then we’ll go ahead and spin off all of them, if not it will be selective.”

Skye’s problems started after it used short-term funds to acquire local lender Mainstreet Bank in 2014 and failed to raise fresh funds. It was in talks with shareholders and new investors last year to raise 30 billion naira but had to suspend the plans due to weak capital markets and the exit of foreign investors as the slide in oil prices hit Nigeria’s economy and currency.

Skye shares have been affected by capital failures, plunging 68 percent this year to hit a nominal value of 0.50 naira, after sliding 41 percent last year.

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