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S&P Global Ratings said on Monday that it has lowered the long-term counterparty credit rating of Skye Bank from CCC+ from CCC-.

The ratings action comes a week after the Central Bank of Nigeria sacked the board and management of Skye Bank, one of Nigeria’s largest banks, after the bank breached regulatory limits on liquidity, capital adequacy, and non-performing loans.

“We consider that Skye Bank is subject to regulatory forbearance and the breach of regulatory ratios will pressure its liquidity position,” S&P said. “We now think that a default of Skye Bank within the next six months is highly likely, absent unanticipated significantly favourable changes in the bank's condition.”

S&P said it has affirmed its 'C' short-term counterparty credit rating on Skye Bank and lowered its long- and short-term Nigeria national scale ratings on the bank to 'ngCCC-/ngC' from 'ngB+/ngB'.

The ratings agency also said it has placed the lender’s global scale short-term rating on credit watch negative, while maintaining the long-term ratings and national scale short-term rating on credit watch negative.

S&P said it aims to resolve its credit watch on Skye Bank in the next 90 days, depending on further management or regulatory actions that may be taken with respect to bank's financial sustainability.

“We could lower our ratings on the bank if we think a default is almost certain,” the ratings agency said. “This could happen if we thought that the bank was unable to make timely and full payment on any outstanding liabilities, due to negative regulatory intervention or the absence of any unexpected extraordinary liquidity support.”

Skye Bank’s stock fell by 7.59 percent, closing at 73 kobo on the Nigerian Stock Exchange on Tuesday. The bank’s share has fallen by over 50 percent this year.