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How Skye Bank Became Polaris Bank

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Skye Bank, one of the banks that emerged after the N25 billion recapitalization ordered by the Central Bank of Nigeria (CBN) in 2005, will always be remembered for its popular jingle-I wish.

However, in terms of administration and smooth-running of the bank, it leaves so much to be desired. In this writeup, we will look at how Skye Bank became Polaris Bank.

The Arrival of Skye…

The bank consolidation exercise which ended on December 31, 2005, led to the reduction of Nigerian banks from 89 to 26. Skye Bank was one of the banks that was established.

The banks that united to form Skye Bank are Prudent Bank, EIB International Bank Plc, Bond Bank, Cooperative Bank, and Reliance Bank.

The bank later acquired Mainstreet Bank a bridge bank for Afribank in 2014. Stakeholders in the banking sector said that the problem of the bank started due to the challenges it inherited from Mainstreet Bank as well as the refusal of bank executives to abide by CBN rules and regulations.

Skye Bank’s License Revocation

In September last year, the Central Bank of Nigeria announced that it has taken over Skye Bank because “The lender failed to meet the regulator’s minimum key liquidity and capital adequacy ratio.

The CBN had accused the board led by Tunde Ayeni (Chairman) and Timothy Oguntayo (Managing Director/CEO) of “Consistently failing to turn the fortunes of the bank around despite consistent warnings from the CBN.

At the time of the takeover, the bank had a negative net asset worth N1 trillion.

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Meanwhile, since Tunde Ayeni’s exit as chairman, he has faced mismanagement and money laundering allegations by the Economic and Financial Crimes Commission (EFCC).

The anti-graft agency is accusing Ayeni of transferring N3,000,000,000.00 (three billion naira) from the defunct Skye Bank Plc Suspense Account to the First City Monument Bank Plc account no. 0758662025 of Control Dredging Company Limited.

Ayeni is being tried alongside a former Managing Director of Skye Bank, Timothy Ajani Oguntayo, Control Dredging Company and Royaltex Paramount Ventures Limited.

Enter Polaris Bank…

After the CBN revoked the license of Skye Bank, the apex bank disclosed that it has appointed a bridge bank named Polaris Bank to take over Skye’s assets and liabilities.

Emefiele who made the announcement said: “Skye Bank requires urgent recapitalization as it can no longer continue to live on borrowed times with indefinite liquidity support from CBN. We have decided to establish a bridge bank, Polaris Bank, to assume the assets and liabilities of Skye Bank.

“The strategy is for AMCON to capitalise the bridge bank and begin the process of sourcing investors to buy out AMCON. By this decision, the license of Skye Bank is hereby revoked.”

The Future of Polaris Bank

The future of Polaris Bank is in the hands of the CBN and the Asset Management Company of Nigeria (AMCON). The AMCON announced that it will kick-off the sale of Polaris Bank after the elections.

The elections are now over and there is no information about the sale of the bridge bank. If anything comes up, we will definitely share the info.

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