The Governor of Central Bank of Nigeria, Godwin Emefiele, has revealed how the CBN invested N800 billion in the recapitalisation of now defunct Skye Bank.
While answering questions from journalists at the end of the monthly policy committee meeting in Abuja last Tuesday, in the country’s capital, Abuja, Emefiele also noted that the choice of the name ‘Polaris’ was for legal reasons and not because it sounded “sexy”.
The CBN invested about N800 billion in the bank, he noted, and as such, the bank’s name had to change in order to reflect the new ownership structure.
In consultation with the Nigerian Deposit Insurance Corporation (NDIC), a bridge bank — Polaris — was set-up for the recapitalisation, as the shareholders of Skye Bank were not able to raise the needed funds to keep the bank afloat.
Announcing the revoking of Skye Bank’s licence, Emefiele said: “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 capitalise the Bridge Bank and begin the process of sourcing investors to buy out AMCON. By this decision, the license of the defunct Skye Bank is hereby revoked.”
In a related development the Central Bank of Nigeria(CBN) recently revoked the operational licences of 182 other financial institutions (OFIs) across the country.
In a notice of revocation of licences of 182 OFIs obtained from its website, the apex banks lists the financial institutions to include 154 microfinance banks, 22 finance companies and six primary mortgage banks.
Giving reasons for the exercise, CBN explained that 62 of the MfBs have already closed shop, while 73 were insolvent; with 11 terminally distressed, while 5 voluntarily filed for liquidation.
As for the finance companies 13 of them failed to recapitalise, eight were on voluntary liquidation and only one was insolvent.
