The Central Bank of Nigeria (CBN) yesterday revoked the license of
Skye Bank, and transferred its assets and liabilities to a newly
licensed bridge bank called Polaris Bank.
Meanwhile, the Nigeria Deposit Insurance Corporation (NDIC) has
sold Polaris Bank to the Asset Management Corporation of Nigeria (AMCON)
with the mandate to stabilise the bank as well as return it to
profitability for the purpose of selling it to interested Investors.
In this regard AMCON will inject N786 billion into Polaris Bank to
bring its net value to zero. CBN Governor, Mr. Godwin Emefiele and NDIC
Managing Director, Alhaji Umaru Ibrahim disclosed this at a joint press
conference in Lagos yesterday.
Emefiele said while the purpose of the CBN’s intervention in Skye
Bank on July 4th 2016 has been achieved the decision to revoke the
license of Skye Bank was due to failure of its shareholders to
recapitalise the bank.
He said: “The focus of the action then was to save depositors’
funds and to ensure that the bank continued as a going concern, being a
systemically important bank. Part of our intention was also to stem the
imminent job losses to staff if a liquidation option had been adopted.
“These objectives have been fully achieved and the bank has
been able to meet customer obligations, having curtailed the liquidity
haemorrhage and restored depositor confidence. Indeed, the bank’s
performance has improved considerably compared to the pre-July 2016 era.
“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 recapitalize it.
“As a responsible and responsive regulator and in consultation
with the Nigerian Deposit Insurance Corporation(NDIC), we have decided
to establish a bridge bank, Polaris Bank, to assume the assets and
liabilities of Skye bank.
“The strategy is for the Asset Management Company of Nigeria
(AMCON) to capitalize the Bridge Bank and begin the process of sourcing
investors to buy out AMCON. By this decision, the licence of the
defunct Skye Bank is hereby revoked.
“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 further disclosed that the shares of Skye Bank would be
suspended on the Nigeria Stock Exchange henceforth till further notice.
Also speaking, MD/CEO of NDIC, Alhaji Umaru Ibrahim said that AMCON
will inject N786 billion facility into Polaris Bank adding that the
fund is a long term loan granted at single digit interest rate.
He said: “In continuation of the Central Bank of Nigeria
intervention in the distressed Skye Bank Plc which started on the 4th of
July 2016 and which was aimed at protecting depositors of that bank,
the NDIC in exercise of its statutory powers under the NDIC Act 2006 and
in consultation with the central bank has organised and incorporated a
bridge bank known as Polaris Bank Limited to assume the deposits and
other liabilities of Skye Bank Plc and acquire its assets.
“Consequently, Polaris Bank Limited has been issued operating
license by the CBN and shall commence banking business from today,
Friday, 21st September.”
“The operating license of Skye Bank has been revoked by the
Governor of the Central Bank and the NDIC has commenced its liquidation.
The capitalisation of Polaris Bank Limited is being done by the Assets
Management Corporation of Nigeria through the injection of about N786
billion to return the bank to soundness and profitability so as to
enable its subsequent sale to credible and financially sound third-party
acquirers.
“The NDIC carried out the bridged bank option so as to resolve
the Skye Bank in order to make certain that its depositors are
protected and the deposits with the Polaris Bank Limited is insured
under the NDIC Act and the customers of Skye bank Plc can continue to
transact business with Polaris Bank limited thereby ensuring non
distribution of thier banking transaction.
“Furthermore, adoption of the bridged bank model for resolution
of Skye Bank Plc guarantees that most of the employees of that bank
would not loose thier jobs and they would continue thier employment with
Polaris bank limited under a fresh contract of employment.
“The NDIC as a deposit insurer acted to ensure the continuous
safety of depositors funds in furtherance of the regulatory authorities
resolve to proactively manage the potential threat to financial
stability.
“The NDIC hereby assures depositors and customers of the
defunked Skye bank that their deposits are safe and hereby encourages
all of them to continue to transact their businesses with Polaris bank.”