The business license of erstwhile Skye Bank Plc was summarily revoked last month (September 2018) by Godwin Emefiele, the CBN Governor. The revocation came about two years after the financial regulator sacked the management in July 2016; the action followed the bank’s inability to meet the mandatory minimum key liquidity and capital adequacy ratios, which failure resulted in “the bank’s permanent presence at the CBN lending window.”

Nonetheless, prior to this revocation, the new management that CBN appointed in July 2016, had reportedly, successfully embarked on initiatives to restructure and reposition the bank, primarily, through cost management and optimization, as well as strategic divestments to improve the institution’s financial position.

The containment measures effected, also included branch rationalization, and review of service contracts and cash management operations.

Regrettably, despite the measures taken, the new management team appointed by CBN still failed to recapitalize the bank, until the Apex Bank stepped up once again, in collaboration with the NDIC to literally buy out Skye Bank, with a fresh capital injection of N786bn, before handing over the bank to AMCON to manage with the new name of POLARIS bank. The ultimate goal, according to Emefiele, is that the Bank will be sold to new private sector buyers, after it has been successfully repackaged and returned to a profitable business, in the next three years under AMCON management.

Notably, with this arrangement, depositors and customers of the defunct Skye Bank, can be assured that their deposits with the new Polaris Bank are safe, and also adequately insured under the NDIC Act. Furthermore, according to the NDIC, the adoption of the bridge bank model to replace Skye Bank, is also expected to guarantee that most of the employees of that bank will not lose their jobs, as they will be able to continue their employment with POLARIS Bank Ltd, albeit, under fresh contracts of employment.

The new arrangement, according to Governor Emefiele, therefore, means that the former shareholders of Skye Bank have lost their investments, while AMCON will run the bank until they find new investors with adequate capital, to become the new owners of Polaris Bank. Invariably, following this development, the trading of erstwhile Skye Bank Plc shares, in the stock market has, therefore, been suspended indefinitely, by the Securities and Exchange Commission.

Expectedly, holders of Skye bank shares which still traded at about 70 kobo/share, before the revocation, are not particularly happy with this development, and they may consider joint counter action against Skye Bank’s license revocation.  Nevertheless, some shareholders have wondered why CBN did not also sack the Board and Management that ran the erstwhile Skye Bank in the last two years before the license revocation, so that a new board and management would be reconstituted. Boniface Okezie, the National Co-ordinator of the Progressive Shareholders’ Association of Nigeria, therefore, warned that “this action of interfering and taking over of banks by CBN will create distortions in the capital market and banking sector and send wrong signal to investors.” Read more<<<<< 

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