Stephen OlgadeA prestigious financial institution in Nigeria, Skye Bank’s Licence has recently been revoked by the Nigeria Apex bank, ‘Central Bank of Nigeria’ and renames the revoked bank (Skye Bank) to Polaris Bank Limited.
The banking revocation was announced by Mr. Godwin Emefiele who is the CBN Governor and MD of Nigeria Insurance Deposit Corporation (NDIC) in Lagos state at a media briefing.
The take over was automatically confirmed after the official twitter username of Skye Bank was changed to Polaris Bank Limited.
But Why was Skye Bank’s Licence Revoked And Taken Over By Polaris Bank limited?
This is the question that flood the social media after the sudden disclosure and I also believed they’re a reason for that.
According to the CBN Governor, Skye Bank Licence is revoked due to the inability of the bank owner to shore up the capital of N350 billion intervention received by the revoked bank in July 2016.
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Emefiele added that Skye Bank needs urgent recapitalization because they can no longer operate as a financial institution in Nigeria on ‘borrowed times’ with indefinite liquidity support from Central Bank of Nigeria, CBN.
Central Bank of Nigeria had also injected the sum of N786 billion with the Asset Management Corporation of Nigeria (AMCON) in order to comment on sales processes in the new bank, Polaris Bank Limited starting from Monday, 23rd of September, 2018.
Is Skype Bank’s License Revocation And Renaming to Polaris Bank Limited Helpful or Not?
The only reason revealed by CBN is that they can no longer inject or lend funds to Skye Bank anymore because the owner and the entire bank management are unable to returned the money lend to them since July 2016.
To save you (as ‘customer’) and CBN funds not to be wasted into the non-profitable bank again, I think you guys should be happy because CBN made the right choice.
The Licence revocation didn’t affect anybody (I don’t know about the bosses) but the staff of previous Skye Bank will still remain as Polaris Bank’s staffs.
After Skye Bank’s license revocation, their share price increased by 4.05 percent at 77 kobos which shows a good start for Polaris Bank limited.
‘Polaris Bank’ is not really a new bank but Skye Bank reformation bank by Central Bank of Nigeria and we can say it’s owned by CBN. So tell me how they will fall into debt again?
The bridge bank, Polaris will start sourcing for investors to buy out AMCON after the full operation on Monday.
But, what do you think about this new development? Do you think Polaris Bank will perform more than formal Skye Bank?
Kindly let’s exchange interesting comments and memes using the comment box below.
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Stephen Olgade
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I had written a piece, When the Skies Fell on Sky Bank, published on this page in October in the aftermath of the fall of Skye Bank and the emergence of the Polaris Bank as its replacement. One of the perennial questions that readers threw at me was how Polaris bank emerged literally overnight to take over the asset and liabilities of Skye Bank that seemed to have been killed simultaneously. It looked too much like abracadabra and I was not surprised that this issue came up at many stages of the forum. I guess many Nigerians used to the intricacies of registering a company with Corporate Affairs Commission, CAC, have found it difficult to comprehend how Polaris emerged overnight. The Polaris is a bridge bank that has taken over a dead one with a view to safe guarding depositors’ money and avoiding systemic run on the overall banking system. The bridge bank also conserves jobs in the industry and inevitably prepares the bank taken over for sale.