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Bank Depositor’s Guide: Ten Quick Things To Know About Skye Bank Takeover

As the Central Bank of Nigeria revokes the license of Skye Bank, and transferred its assets and liabilities to a newly licensed bridge bank, here are things the bank’s depositors need to know.

The Central Bank of Nigeria (CBN) on Friday announced the takeover of Skye Bank by a bridge bank, Polaris.
Here are 10 basic things to know about the entire process and future expectations:
1. Skye bank’s operating license has been withdrawn
The Central Bank of Nigeria has withdrawn the license of the bank, effective Friday.
2. CBN, NDIC have established bridge bank – Polaris
The CBN, in consultation with the Nigerian Deposit Insurance Corporation (NDIC), has established a bridge bank that will survive the bank known as Polaris. A bridge bank is a bank authorized to hold the asset and liabilities of another bank, specifically an insolvent bank.
3. Polaris takes over Skye Bank
Effective Monday, all asset and liabilities of Skye Bank have been taken over by the new bridge bank, Polaris.
4. What happened to Skye Bank?
On the 4th of July 2016, the CBN took a regulatory action on Skye Bank Nigeria PLC, leading 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.
5. Why ‘regulatory action’?
The focus of CBN’s regulatory 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 the apex bank’s intention was also to stem the imminent job losses to staff if a liquidation option had been adopted.
6. What happened afterwards?
Although CBN said the bank had improved after the ‘regulatory action’, the result of its forensic audit of the bank 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.
7. What’s the new strategy about?
The strategy 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.
8. What happens to depositor’s money?
By the arrangement, the CBN said all depositors’ 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.
9. New bank, new name
By Monday, customers of Skye Bank shall be automatic customers of the new bank and their accounts and records duly purchased by Polaris Bank.
10. What about the management and staff of Skye bank?
According to the CBN, 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 an employee decides to opt out.
Source: PREMIUM Times
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