Why CBN revoked Skye Bank license as Polaris takes over

The Central Bank of Nigeria (CBN) has revoked the licence of Skye Bank Plc and has transferred the liabilities, assets and management of the distressed bank to a newly licenced Polaris Bank.

All these will be aptly driven by the Asset Management Corporation of Nigeria (AMCON).

The announcement of the take-over was made at a late press conference Friday addressed in Lagos by CBN Governor Godwin Emefiele.

According to him, the decision was reached following the inability of the owners of the bank to shore up the capital of the distressed bank which had earlier received a N350 billion intervention in July 2016.

In the new dispensation, Apex News gathered, Polaris Bank will be getting a single digit interest long term facility of N786billion from the Assets Management Corporation of Nigeria (AMCON) to ensure the bank continues as a going concern.

Emefiele said 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.

The Managing Director and Chief Executive of NDIC, Umaru Ibrahim, said the option of a bridge bank was to ensure that the depositors of the bank are taken care of and deposits are not lost.

He said the bridge bank would also ensure that there would be no job losses as Polaris Bank would retain all staff of the distressed bank under a new contract.

Similarly, the management of the distressed Skye Bank would be retained to continue to manage the newly licenced Polaris Bank based on their good performance.

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