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CBN revokes Skye Bank’s license as Polaris Bank takes over

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The Central Bank of Nigeria (CBN) has revoked the operating license of Skye Bank.

The CBN Governor, Godwin Emefiele, and the Managing Director of the Nigeria Deposit Insurance Corporation (NDIC) Alhaji Ibrahim Umaru disclosed this at a joint press briefing in Lagos on Friday.

Emefiele said the bank will now be taken over by Polaris Bank, which will take over all the assets and liabilities of the defunct financial institution.

The CBN came down on Skye Bank, following the failure of its shareholders to recapitalise the bank, even as the apex Bank has suspended trading in shares of the bank on the Nigeria Stock Exchange (NSE) indefinitely.

The development came after CBN’s consultations with the NDIC to establish of Polaris Bank, and accorsing to Emefiele, the NDIC also sold Polaris Bank to the Asset Management Company of Nigeria (AMCON) so as to capitalise and stabilise the bank and return it to the path of profitability for the purpose of selling it to interested investors.

The CBN Governor also disclosed that trading in the shares of Skye Bank would henceforth be suspended on the Nigerian Stock Exchange (NSE) till further notice.

Why CBN revoked Skye Bank’s License

It would be recalled that prior to 2016, Skye Bank was faced with some crises, including losses, liquidity challenge, inability to meet customers’ obligation and poor performance which undermined overall customers’ confidence.

On July 4, 2016, the CBN intervened in Skye Bank to salvage depositors’ funds and to ensure the sustainability of the bank.

Emefiele said, “The result of our examinations and forensic audit of the bank has, however, revealed that the Skye bank requires urgent recapitalisation as it can no longer continue to live on borrowed times with indefinite liquidity support from the CBN. The shareholders of the bank have been unable to recapitalise it.

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“We wish to assure all depositors that under this arrangement, their deposits shall remain safe and that normal banking services shall continue in the new bank on Monday, 24th September, 2018, to enable customers to transact their businesses seamlessly.

“Thus, all customers of Skye Bank shall be automatic customers of the new bank and their accounts and records duly purchased by Polaris Bank.

“Given the good performance of the board and management, the CBN shall retain them. In addition, all employees of Skye Bank shall be absorbed by Polaris Bank under a new contract unless any employee decides to opt out.

“We wish to assure the general public that the Nigerian banking industry remains safe and resilient and that the CBN will continue to live up to its responsibilities of promoting stability in the banking and financial system,” Emefiele said.

AMCON to inject N786 billion into Polaris Bank

On his part, Ibrahim said that AMCON will inject a total of N786 billion facility into Polaris Bank to bring its net value to zero.

According to him, the fund is a long-term loan granted to the bridge bank at single digit interest rate.

The NDIC Managing Director assured that all depositors and customers of the defunct Skye bank that their deposits are safe and encouraged them to continue to transact their businesses with Polaris Bank.

 

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