Nigeria’s central bank has revoked the operating licence of Skye Bank. As a result, it created an entity called Polaris to assume all the assets and liabilities of the lender.

Earlier in 2016, the Central Bank of Nigeria (CBN) sacked the top management of Skype Bank for failing to maintain minimum thresholds in critical prudential and adequacy ratios as well as for lapses in corporate governance.

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These measures helped the bank avoid liquidation, save depositors’ funds and prevent job losses.

However, the central bank’s new assessment and forensic audit of the bank found that Skye requires immediate recapitalisation. It is impossible to sustain ‘as it can no longer continue to live on borrowed times with indefinite liquidity support from the CBN’.

Polaris

Accordingly, CBN formed Polaris Bank as a bridge bank in consultation with Nigerian Deposit Insurance (NDIC).

Under the arrangement, all customers of the Skye Bank will be automatically transferred to Polaris Bank. They can continue their usual banking operations.

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In a statement, CBN governor Godwin Emefiele said: “We wish to assure all depositors that under this arrangement, their deposits shall remain safe and that normal banking services shall continue in the new bank on Monday, 24th September, 2018, to enable customers to transact their businesses seamlessly.”

The government agency Asset Management Company of Nigeria (AMCON) will now capitalise Polaris owning 100% stake in the company.

Subsequently, the process of divesting the bridge bank stake to potential investors will begin.

The CBN also announced that the current board, management, and employees will be retained and will continue their operations.