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Why CBN revoked Skye bank’s licence

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The Central Bank of Nigeria, CBN, has on Friday withdrawn the operating license of Skye Bank, due to failure of the bank shareholders recapitalize it.

The revocation of Skye Bank’s operating licence follows the Central bank’s decision to pause its injection of funds processes in the lender.

CBN governor and the Managing Director of the Nigeria Insurance Deposit Corporation, NDIC, Godwin Emefiele and Umar Ibrahim respectively, disclosed this on Friday at a media briefing in Lagos.

Mr Emefiele also announced the change in the name of Skye Bank to Polaris Bank which takes over the bank.

He said an injection of N786 billion has been made into the bank with the Asset Management Corporation of Nigeria, AMCON, has been directed to commence the sale process of the bank from Monday.

Emiefele, however revealed that the result of an examinations and forensic audit of the bank by CBN showed 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 recapitalize it.” He said

He continued “As a responsible and responsive regulator and in consultation with the Nigerian Deposit Insurance Corporation(NDIC), we have decided to establish a bridge bank, Polaris Bank, to assume the assets and liabilities of Skye bank.

“The strategy is for the Asset Management Company of Nigeria (AMCON) to capitalize the Bridge Bank and begin the process of sourcing investors to buy out AMCON. By this decision, the licence of the defunct Skye Bank is hereby revoked.

“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” he said.

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