First Bank, Sterling Bank, Unity Bank and Skye Bank in Bad Shape: Report

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CBN Building
CBN Building

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FOUR Nigerian banks are in a terrible shape, according to the result of a stress test conducted by a Dubai-based international investment bank, Arqaam Capital.

A Bloomberg report quoting the stress test named the four banks as First Bank, Sterling Bank, Unity Bank and Skye Bank.

The report quoted Jaap Meijer and Tarek Sleiman, analysts at the investment and brokerage bank, as saying on Monday: “Unity Bank and Skye Bank are close to being insolvent, while lenders, FBN Holdings Plc and Sterling Bank Plc, will need a dilutive capital hike.”

The report indicated that while seven Nigerian banks are undercapitalised to the tune of N1tn ($3.2bn), the aforementioned four are in worse shape.

Some of the affected banks have disagreed with the report.

The PUNCH quoted spokesman for First Bank, Mr. Babatunde Lasaki, as saying: “First Bank is not undercapitalised. We are still within the industry regulatory threshold. This is their opinion. Our position has been published in our half-year report; it is not the one from an investment bank or a speculative report. Our Q3 report will soon be published.”

An unnamed top source at Unity Bank reportedly said the bank was still meeting its obligations.

The paper quoted the source as saying: “Our financial position has been enhanced. We have just moved our head office to Lagos in order to be closer to the market and retail market. All these strategic investment decisions have shored up market confidence in the bank.”

Similarly, a top official of Skye Bank, who spoke on condition of anonymity, said the bank was not close to being insolvent, The PUNCH said.

In the case of Sterling Bank, the Chief Financial Officer, Abubakar Suleiman, told Bloomberg that the bank is planning to issue a N27 billion bond and “if the interest rate looks better, we will do it this year.”

News Express reports that the Central Bank of Nigeria (CBN) recently cleared all Nigerian banks, declaring them to be healthy. – News Express

—  Oct 11, 2016 @ 20:15 GMT

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