Why Nigeria’s Central Bank withdrew Skye Bank’s licence
On Friday, Nigeria’s Central Bank revoked the operating licence of one of the country’s largest banks and handing it over to a newly formed institution, Polaris Bank.
Godwin Emefiele, the governor of the CBN announced the withdrawal at a press briefing; saying that the bank could no longer service its shareholders despite receiving a 350 billion naira intervention in July 2016.
The announcement came as a shock to many observers whose concerns may have been assuaged when only this past April, the CBN passed a vote of confidence on the board of the bank and gave it an additional two years to steady the ship of operations.
According to Emefiele, “The result of our examinations and forensic audit of the bank has, however, revealed that Skye bank requires urgent recapitalisation as it can no longer continue to live on borrowed times with indefinite liquidity support from the CBN. The shareholders of the bank have been unable to recapitalise it.”
He went ahead to assure account holders that their funds will not be affected as they would automatically become customers of the new Polaris Bank. “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.
The CBN governor, however, added that the management and board of the now-defunct Skye Bank, led by CEO Tokunbo Abiru will not be dissolved due to their “good” performance since 2016.
Skye Bank was formed in 2006 after a recapitalization merger that saw Prudent Merchant Bank Limited coalesce with EIB International Bank Plc, Bond Bank Limited, Reliance Bank Limited and Co-operative Bank Plc. It acquired Mainstreet Bank in 2014.
