The Central Bank of Nigeria, CBN says it revoked the license of Skye Bank after examinations and forensic audit that revealed that the bank requires urgent recapitalisation.
Godwin Emefiele, Governor of the CBN also disclosed that Skye Bank can no longer continue to live on borrowed times with indefinite liquidity support from the CBN.
According to Emefiele, shareholders of the bank have been unable to recapitalise it after CBN initial intervention on 4th July 2016 to save depositors’ fund and prevent job losses.
This action, he recalled, 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.
He also explained that the proactive action was informed by unacceptable corporate governance lapses as well as the persistent failure of Skye Bank to meet minimum thresholds in critical prudential and adequacy ratios, which culminated in the bank’s permanent presence at the CBN Lending Window.
“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.
“These objectives have been fully achieved and the bank has been able to meet customer obligations, having curtailed the liquidity haemorrhage and restored depositor confidence.”
He further explained that the CBN in consultation with the Nigerian Deposit Insurance Corporation, NDIC, decided to establish a bridge bank, Polaris Bank, to assume the assets and liabilities of Skye Bank. The strategy, according to him, is for the Asset Management Company of Nigeria, AMCON, to capitalise the Bridge Bank and begin the process of sourcing investors to buy out AMCON.
The CBN Governor assured 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.
He assured that all customers of Skye Bank shall be automatic customers of the new bank and their accounts and records duly purchased by Polaris Bank.
“Given the good performance of the board and management, the CBN shall retain them. In addition, all employees of Skye Bank shall be absorbed by Polaris Bank under a new contract unless any employee decides to opt out.
“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.”