The recent revocation of the license of Skye Bank by the Central Bank of Nigeria (CBN) has continued to generate divergent reactions from Nigerians. The Apex bank yesterday announced the establishment of a bridge bank, Polaris Bank, to take over activities of the now defunct Skye Bank.
Before we give you reactions from Nigerians, Here is a timeline of events leading to the new announcements.
- The Apex Bank on 4th July, 2016 took regulatory action on Skye Bank Nigeria Plc.
- This action led to the resignation of the Chairman, all Non-Executive Directors on the Board as well as the Managing Director, Deputy Managing Director, and the two longest serving Executive Directors on the Management Team.
- According to CBN, the performance of the bank has improved considerably compared to the pre-July 2016 era.
- However, result of examinations and forensic audit of the bank has revealed that Skye Bank requires urgent recapitalisation as it can no longer continue to live on borrowed times with indefinite liquidity support from the CBN. The shareholders of the bank have been unable to recapitalise it.
- The apex bank has established a bridge bank, Polarise Bank, to assume assets and liabilities of Skye Bank.
- This will enable the Asset Management Company of Nigeria (AMCON) to capitalise the Bridge Bank and begin the process of sourcing investors to buy out AMCON.
- Nigeria Deposit Insurance Company (NDIC) has also injected N786 billion into the new bank.
- Immediate effect of the announcement has kicked off; starting with replacement of old Skye bank Twitter handle avatar with that of Polaris bank – a triple diagonal flat bar lying side by side on a purple background.
- The official website of the bank seem like it is under reconstruction meanwhile, Polaris Bank logo takes up the entirety of the site.
Transition to Polaris Bank Limited.#newbeginnings pic.twitter.com/dW5XaqUDy4
— Polaris Bank Ltd. (@PolarisBankLtd) September 21, 2018
The year 2005 saw the debut of what used to be known as Skye Bank, a product of merger of Prudent Bank Plc, EIB International Plc, Bond Bank Limited, Reliance Bank Limited and Co-operative Bank Plc. Skye Bank was popularly known as the “yes bank” and their captivating jingle still ring a bell.
Many Nigerians recorded the new development on a note of question:
Everything that was in Skye Bank (Staff, deposits) is moving to ‘Polaris Bank’ …except the $2bn of bad loans – almost half of which was to the shareholders. So if you want to ask questions – ask who is covering that hole and why
— tyro (@DoubleEph) September 21, 2018
But the big elephant in the room is shateholders equity.
Prior to the news, Skye Bank closed at 77Kobo.
What happens to that?
As take over means it had negative shareholder funds
— Olúwatósìn Olaseinde (@tosinolaseinde) September 22, 2018
Afri Bank fold … AMCON Takes Over
AMCON Changes name to Mainstreet Bank
AMCON Sells Mainstreet Bank to Skye Bank
Skye Bank folds, AMCON Takes Over
AMCON changes Skye Bank’s name to Polaris Bank
Who’s next to buy … please RT buyer could be on your TL
— BeingHumanAintEnough (@realdanielemeka) September 21, 2018
Skye Bank use to have one of the best commercial that year. Goodbye Skye Bank, till we meet again
Welcome, Polaris Bank! Hope the Nigeria weather treats you fair.
— The Gidi Hustler™ (@sammy_unusual) September 22, 2018
I am not here to debate what has happened to the bank but to tell people what is happening. The bank did not collapse. It is in the process of recapitalisation and Polaris bank is just a bridge to new investors coming in. Former management gave loans to directors and not paid
— oladapo olowo (@saved4live) September 22, 2018
The central bank and the management of new Polaris bank maintained safety of customer’s deposits alongside smooth transition that will in no way affect human resources, it however left an open door to anyone willing to opt out. Regardless, many still express fear, anxious over the new management. Many traced the long history of merger that led to the defunct of Skye Bank
most of which were insider loans which didn’t pass through the minimum Risk Assessment and Acceptance Criteria and which of course eventually failed with the severe dip in oil prices around ’15. The bank had been dragging along near death for many years hence this action from CBN
— Nnamdi (@presidentnm) September 22, 2018
They already had CBN appointees running the bank for a while now (a kinsman who was once sent to Keystone on a similar job is ED there). I guess they needed to legally remove the shareholders, whose interest was long eroded by the Board, from interfering with the salvage effort.
— Nnamdi (@presidentnm) September 22, 2018
Despite attempt by the apex bank to allay the fear hovering in the sky, the populace are still asking what the fate of Skye bank employees would be.
I hope people wont lose their Jobs with this Polaris take over of Skye Bank
— Cinderella Man (@Osi_Suave) September 22, 2018
CBN and National Orientation Agency should have handled this Skye Bank thing better. Monday might be chaotic across their branches.
— Dr. Dípò Awojide (@OgbeniDipo) September 21, 2018
So Skye bank has been changed to Polaris? Wonder what will happen to the workers tho.
— Blessing (@bibiegurl1) September 21, 2018