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Skye Bank Becomes Polaris Bank as CBN Revoke Licence

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Skye Bank Becomes Polaris Bank as CBN Revoke Licence. The Central Bank of Nigeria (CBN) yesterday revoked the license of Skye Bank, transferring its liabilities, assets and management to a newly licensed entity, Polaris Bank, to be driven by the Assets Management Corporation of Nigeria (AMCON).

Polaris Bank will be getting a single digit interest long term facility of N786 billion from the Assets Management Corporation of Nigeria (AMCON) to ensure that the bank continues as a going concern.

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Speaking at a press conference to announce the revocation of Skye Bank’s license, the governor of Central Bank of Nigeria, Godwin Emefiele, said the decision was reached following the inability of the owners of Skye Bank to shore up the capital of the distressed bank which had earlier received a N350 billion intervention in July 2016.

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“Skye Bank requires urgent recapitalization as it can no longer continue to live on borrowed times with indefinite liquidity support from the CBN. We have decided to establish a bridge bank, Polaris Bank, to assume the assets and liabilities of Skye Bank. The strategy is for AMCON to capitalise the bridge bank and begin the process of sourcing investors. By this decision the license of Skye Bank is hereby revoked,” Emefiele said.

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The Managing Director and Chief Executive of the Nigerian Deposit Insurance Cooperation (NDIC), Umaru Ibrahim who was also at the briefing, said the option of a bridge bank was to ensure that the depositors of the bank were taken care of and deposits are not lost.

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Ibrahim further said the bridge bank would also ensure that there would be no job losses as Polaris Bank would retain all staff of the distressed bank under a new contract.

Similarly, the management of the distressed Skye Bank would be retained to continue to manage the newly licensed Polaris Bank based on their good performance, he said.

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Emefiele said following discussions with the Nigerian stock Exchange, the shares of the distressed Skye Bank would be suspended from trading on the capital market until discussions are concluded.

It would be recalled that on July 4, 2016 the CBN took a regulatory action on Skye Bank which led to the resignation of its chairman, all non-executive directors on the board as well as the managing director, deputy managing director and the two longest-serving executive directors on the management team.

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Emefiele said: “The result of our examinations and forensic audit of the bank have revealed that 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 recapitalize it.”

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He assured that all depositors that under this arrangement, their deposits would remain safe and that normal banking services would continue in the new bank on Monday, September 24, 2018, to enable customers transact their businesses seamlessly.

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Meanwhile, the spokesman of Nigeria Deposit Insurance Corporation (NDIC), Mohammed Kudu Ibrahim, told Daily Trust yesterday that the corporation hadn’t taken a regulatory position on Skye Bank.

He reiterated that the issuance and revocation of license were within the purview of the CBN and until the CBN acts, the NDIC cannot act. He also said the NDIC would issue its position on the matter once it took a position.

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