Governor of the CBN, Godwin Emefile, broke the news of revoking Skye Bank’s license at a press conference in Lagos. However, the Apex bank said depositors’ funds remain safe as they.
Emefiele with whom were Nigeria Deposit Insurance Corporation (NDIC) Managing Director, Umaru Ibrahim, and Asset Management Corporation of Nigeria Managing Director, Ahmed Kuru, said the apex bank took the decision to stop Skye Bank from continuously relying on CBN’s intervention to remain afloat.
A new bank, Polaris, has been established to assume the ownership of the assets and liabilities of Skye Bank.
The NDIC has injected N786 billion into the new bank.
The funds , according to Umaru Ibrahim, the NDIC Managing Director, are a long-time loan priced at single digit interest rate.
He said the liquidation of defunct Skye Bank will commence immediately and that depositors’ funds remain safe.
Ibrahim said that new investors are expected to see the value in the new bank and buy it from the Asset Management Corporation of Nigeria which is the new owner of Polaris Bank. The management of the defunct bank was however retained for its good performance.
READ: SAD: Bank manager drown in Uyo Beach, Brother who dived to rescue dint return
The defunct Skye Bank had been on the CBN’s lifeline since July 2016 and the apex bank says it can no longer continue to intervene to keep the bank liquid.
Emefiele said the defunct Skye Bank relied on the liquidity support of the CBN, and for the CBN to continue to support it, it must be owned by the Federal Government.
He said: “You will recall that on 4th July, 2016, we took a regulatory action on Skye Bank Nigeria PLC. Specifically, this action led to the resignation of the 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.”
Continuing, he said the proactive action was informed by unacceptable corporate governance lapses as well as the persistent failure of Skye Bank PLC to meet minimum thresholds in critical prudential and adequacy ratios, which culminated in the bank’s permanent presence at the CBN Lending Window.
The focus of the action then, he added, 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, he stated.
Emefiele said 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 have, 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.
