Shareholders To Lose All Investment In Skye Bank

Shareholders To Lose All Investment In Skye Bank

THE Central Bank of Nigeria Governor, Godwin Emefiele, summarily revoked the business license of erstwhile Skye Bank Plc last month (September 2018). This happened just two years after the financial regulator sacked the management. That was in July 2016; the action followed the bank’s inability to meet the mandatory minimum key liquidity and capital adequacy ratios. This failure resulted in the bank’s permanent presence at the CBN lending window.

The new management that CBN appointed in July 2016 had, reportedly, successfully embarked on initiatives to restructure and reposition the bank, primarily, through cost management and optimization, as well as strategic divestments to improve the institution’s financial position. The containment measures effected, also included branch rationalization, and review of service contracts and cash management operations.

Regrettably, despite the measures taken, the new management team still failed to recapitalize the bank, until the Apex Bank stepped up once again, in collaboration with the NDIC to literally buy out Skye Bank, with a fresh capital injection of N786bn, before handing over the bank to AMCON to manage with the new name of POLARIS bank.

The ultimate goal, according to Emefiele, is that the Bank will be sold to new private sector buyers, after it has been successfully repackaged and returned to a profitable business, in the next three years under AMCON management. Notably, with this arrangement, depositors and customers of the defunct Skye Bank, can be assured that their deposits with the new Polaris Bank are safe, and also adequately insured under the NDIC Act.

Furthermore, according to the NDIC, the adoption of the bridge bank model to replace Skye Bank, is also expected to guarantee that most of the employees of that bank will not lose their jobs, as they will be able to continue their employment with POLARIS Bank Ltd, albeit, under fresh contracts of employment. The new arrangement, according to Governor Emefiele, therefore, means that the former shareholders of Skye Bank have lost their investments, while AMCON will run the bank until they find new investors with adequate capital, to become the new owners of Polaris Bank.

We think you'd love these too...

Related posts

Leave a Reply

Your email address will not be published. Required fields are marked *