CBN governor assures Skye Bank customers that their deposits are safe with the new Solaris Bank

CENTRAL Bank of Nigeria (CBN) governor Godwin Emefiele has assured all Skye Bank depositors that their money is safe despite the licence of the struggling financial house being revoked due to its mounting debts.

Yesterday, the CBN in consultation with the Nigerian Deposit Insurance Corporation (NDIC), took over the assets of the struggling Skye Bank and renamed it Polaris Bank. Following the takeover, fresh N786bn ($2.16bn) soft and long-term financing at single digit interest rate has been injected to keep the rejuvenated operations ongoing, while the initial N350bn injected into it by the CBN would be withdrawn.

According to Mr  Emefiele, the strategy was for the Asset Management Company of Nigeria (Amcon) to capitalise the bridge bank and begin the process of sourcing investors to buy out Skye Bank. He added that the result of examinations and a forensic audit revealed that Skye Bank required urgent recapitalisation and can no longer continue to live on borrowed times with indefinite liquidity support from the CBN.

On July 4, 2016, the CBN took regulatory action against Skye Bank, leading to the resignation of its chairman, all its non-executive directors, as well as the managing director, deputy managing director and the two longest-serving executive directors on the management team. despite this, however, Skye Bank has continued to struggle, practically living on life support and none of his shareholders have been able to bail it out.

Following the latest takeover, Mr Emefiele said the focus will now be to save depositors’ funds and ensure the bank continued as a going concern. He added that the CBN, NDIC and Amcon also hoped to stem imminent job losses if the liquidation option had been adopted and now and the bank has been able to meet customer obligations, having curtailed the liquidity haemorrhage and restored depositor confidence.

Mr Emefiele added: “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. Thus, all customers of Skye Bank shall be automatic customers of the new bank and their accounts and records duly purchased by Polaris Bank.

“We wish to assure the general public that the Nigerian banking industry remains safe and resilient and that the CBN will continue to live up to its responsibilities of promoting stability in the banking and financial system. As a responsible and responsive regulator and in consultation with NDIC, we have decided to establish a bridge bank Polaris Bank, to assume the assets and liabilities of Skye Bank.

He added that given the good performance of the Sky Bank board and management, the CBN would retain them, as well as all employees under a new contract, unless anyone decides to opt out. Over the last two years, Skye Bank has been on life support, for the second time in its history as former CBN governor Mallam Lamido Sanusi saved it from collapse in 2010.