Home BUSINESS BANKING & FINANCE CBN Establishes Polaris Bank To Take Over ‘Liquidated’ Sky Bank

CBN Establishes Polaris Bank To Take Over ‘Liquidated’ Sky Bank

The Central Bank of Nigeria (CBN) has announced the establishment of Polaris Bank to take over Sky Bank which it said, has been incapable of recapitalizing to continue in business.

The CBN Governor, Godwin I.  Emefiele, who announced this today, Friday,  when he addressed news men in Lagos, assured all depositors of Sky Bank that under the new 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.”

Emefiele recalled that the result of the apex bank’s examinations and forensic audit of the Sky Bank revealed that it required urgent recapitalization “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.”

He recalled that on 4th July 2016, CBN took a regulatory action on Skye bank Nigeria PLC, which 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.

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“At that time 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 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.

The CBN Governor said that given the good performance of the board and management, the CBN shall retain them in the new bank, adding that 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.”

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