CBN Revokes Skye Bank licence, Floats New Polaris Bank As Replacement
By Olumidagreaton September 21, 2018
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The Central Bank of Nigeria (CBN) has revoked the banking licence of ailing Skye Bank and transferred all its assets and liabilities to a bridge bank, named Polaris Bank, the regulatory bank governor said on Friday.
Godwin Emefiele, CBN governor said at a briefing in Lagos on Friday that Nigeria’s ‘bad bank’ Assets Managment Corporation of Nigeria (AMCON) should commence the process to sell the new bank to interested investors.
The country’s financial market regulator had taken over Skye Bank in July 2016, after the commercial lenders failed to meet minimum key liquidity and capital adequacy ratios.
The CBN replaced the board and management of the bank then with its own appointee, charging them to turn around the fortune of the lender within a stipulated period.
Emefiele had blamed the old board and management for consistently failed to turn the fortunes of the bank around despite consistent warnings from the CBN.
Emefiele said the decision had been reached following the inability of the owners of the bank to shore up the capital of the distressed bank which had earlier received a 350 billion naira intervention in July 2016.
“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 to buy out AMCON.
“By this decision, the licence of Skye Bank is hereby revoked,” he said.
Also, the management of the distressed Skye Bank would be retained to continue to manage the newly licenced Polaris Bank.
According to the CBN governor, given the good performance of the board and management, the CBN shall retain them.