5 amazing revelations you never knew about Polaris bank
Polaris bank came into existence in Nigeria in September 21st 2018. If you’re a good student of history you will remember that defunct Skye bank had in 2016 been under the watch of CBN after the highest authority discovers what it called unacceptable corporate governance lapses.
Mentioned in the chronicles of the defunct Skye bank sins as well are persistent failure of Skye bank PLC to meet minimum thresholds in critical prudent and adequate form. This in turn keeps the Bank in constant need of CBN financial assistance to sustain existence.
Having come to understand that the Bank can no longer continue to live on borrowed funds after two years, CBN then deem it fit to seek urgent recapitalization for the defunct Skye bank.
Also keep on record that most of the board members as at 2016 were forced to take a compulsory resignation, new board was constituted having found that the initial board apparently wrecked the bank to a then state of coma. There was no news of any arrest or prosecution to that effect.
It is in view of this trend that CBN seek to protect customers’ funds hereby withdrew the operating license of Skye Bank on 21st September 2018, commence recapitalization of the bridge bank, Polaris Bank, through (AMCON) Asset Management Company of Nigeria after thorough consultation with the (NDIC) Nigerian Deposit Insurance Commission.
It’s however on this premise that I find it pertinent to bring to your notice five major things you don’t know about Polaris Bank.
- Have you cared to ask what a bridge bank is? According to the CBN governor Mr Godwin Emefiele, while addressing Nigerians on the event of Skye Bank transition on the 21st day of September 2018, he said and I quote “In consultation with the (NDIC), the CBN decides to establish a bridge bank, Polaris Bank, to assume the assets and liabilities of Skye Bank.
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A Bridge Bank is an institution created by a national regulator or Central Bank to operate a failed bank until a BUYER can be found for its operations.
Let me state it in black and white that Polaris Bank is still a transition process, it will be acquired by any Nigerian Bank who deem fit in the nearest time possible, Polaris Bank is not an end, but a means to an end if ever there could be an end in view.
- All defunct Skye Bank shares are gone: Yes you heard me, if you have any unit of share with Skye Bank, that was Skye bank and not Polaris Bank. In effect, this is why Skye Bank license was revoked and issued to a bridge bank. You can’t lay any claim to those shares, they’re gone for good. You just forfeited those shares.
Skye Bank as a business has been wind up, another business has emerged apart from Skye Bank. So they’re two different businesses, you can’t lay claim of anything on Polaris Bank.
- Polaris Bank has never been in existence as a bank in Nigeria: It has been a common trend in Nigeria for existing banks to merge or be acquired by another at being distressed. It’s however not applicable to Polaris Bank who emerges as a product of sudden outcome.
- Polaris Bank Limited is duly registered with RC 1525101: Against media report making rounds on the social media that the bank isn’t registered with the corporate affairs commission as mandated by law, hereby deem it fit with the above status that the bank is fit to carry out business transactions in the country and beyond being well registered.
According to the corporate affairs commission in its publication dated 24th September 2018. The attention of the commission has been drawn to reports in the social media on the status of the registration of Polaris Bank Limited. The commission wishes to inform members of the general public that Polaris Bank Limited, RC 1525101 has been duly registered by the commission, with banking services as its main object.
In view of the foregoing, the suggestion that Polaris Bank limited is not registered is not correct. It is erroneous and misleading. The public is enjoined to disregard such media report.
- Polaris Bank is strong and better: At the time Skye Bank was taken over by CBN, Skye bank had a negative net asset worth of N1 trillion which constituted a sad commentary on the capital requirement of N25 billion for Nigerian Banks.
This shows that the bank has grossly lost any justification to exist as a bank and was operating as a mere drain on depositors’ funds. The incidence of bad insider loans granted to recalcitrant debtors cannot be ruled out as a critical failure factor.
From a living a report, four individuals and corporate insiders accounted for N446billion in insider related loans drawn from Skye bank. In this order; N89 billion to a former director to acquire shares in a disco, N190 billion loans to a company linked to a non-executive director, and three hefty loans amounting to N110 billion which a corporate body received to invest in oil and electricity assets.
Millions of dollars were allegedly diverted to personal use, all by insiders.
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The good news is that however, Asset Management Company of Nigeria (AMCON) has injected N786 billion into Polaris bank to further enhance its stability as well meet international best practices as a standing financial institution in Nigeria.
The acts that brought Skye bank to her knees and ends her existence should be a must watch by other Nigerian commercial banks to further avoid towing this ugly path going forward. The perpetrators of this financial wreck should however be brought to book to serve as deterrent to intending offenders going forward.
Raphael Orji is a freelance writer, professional blogger and a content marketing consultant. I work with small businesses, startups and entrepreneurs in building their brand image with high quality blogging and content marketing strategy.
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