CBN revokes Skye Bank’s licence, assures safety of depositors’ funds


Customers of the defunct Skye Bank Plc have been assured of the safety of their deposit despite the revocation of the operating licence of the bank on Friday. The Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation gave this assurance to erase fears and prevent a possible run on the bank.

Godwin Emefiele, Governor, CBN

A bridge bank known as Polaris Bank has also been created to assume the assets and liabilities of Skye Bank. A bridge bank is a bank created and authorized by a regulator or central bank to operate a failed bank until a buyer can be found for its operations.

By this development, “all customers of Skye Bank shall be automatic customers of the new bank and their accounts and records duly purchased by Polaris Bank,” Godwin Emefiele, Governor of CBN explained.

“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 business seamlessly,” Emefiele said.

The Nigeria Deposit Insurance Corporation (NDIC) has equally concluded Polaris Bank’s sales to the Asset Management Corporation of Nigeria (AMCON) with the mandate to stabilise and make it attractive to investors. With the development, AMCON’s injection of about ₦₦786 billion will bring the bank’s net value to zero and put it on the path of profitability for the planned sale commencing on Monday, September 24, 2018.

Umaru Ibrahim, Managing Director, NDIC

Umaru Ibrahim, Managing Director, NDIC, explained that the deposits with the Polaris Bank had been insured under the NDIC Act and the customers of Skye Bank could continue to transact business with the new bank.

“The NDIC as a deposit insurer acted to ensure the continuous safety of depositors’ funds in furtherance of the regulatory authorities’ resolve to proactively manage the potential threat to financial stability. The NDIC hereby assures depositors and customers of the defunct Skye Bank that their deposits are safe and hereby encourages all of them to continue to transact their business with Polaris Bank,” Ibrahim said.

The CBN Governor said the decision to revoke the licence of the old bank was taken following the inability of the owners of the bank to shore up the capital of the distressed bank which had earlier received a ₦350 billion intervention in July 2016, stressing that “Skye Bank requires urgent recapitalisation as it can no longer continue to live on borrowed times with indefinite liquidity support from the CBN.”

Emefiele recalled that on July 4, 2016, the CBN took a regulatory action on Skye Bank that led to the resignation of its chairman, all non-executive directors on its board as well as the managing director, deputy managing director, and the two longest-serving executive directors on the management team.

At that time, he added, the action was informed by the unacceptable corporate governance lapses as well as the persistent failure of the bank to meet minimum thresholds in critical prudential and adequacy ratios, which culminated in the bank’s permanent presence at the CBN lending window.

He said, “The focus of the action then was to save depositors’ funds and to ensure that the bank continued as a going concern, being a systemically important bank. Part of our intention was also to stem the imminent job losses to staff if a liquidation option had been adopted.”

Emefiele said these objectives had been fully achieved, with the bank able to meet its customers’ obligations, having curtailed the liquidity haemorrhage and restored depositors’ confidence.

According to him, the bank’s performance has improved considerably compared to the pre-July 2016 era.

Meanwhile, the Nigerian Stock Exchange (NSE) has officially notified the investing public that Skye Bank shares would be suspended from trading on Monday, September 24. In a statement signed by

Olumide Orojimi, Head, Corporate Communications and Godstime Iwenekhai, Head, Listings Regulations, NSE said the action was taken following the revocation of the bank’s operating licence by CBN, and that it was in line with the “Rules on Suspension of Trading in Listed Securities, Rulebook of The Exchange (Issuers’ Rules).”



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