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Nigeria's central bank withdraws Skye Bank's operating license, secures customers' deposit with a bridge bank.

Umar Ibrahim, chairman of the Nigeria Deposit Insurance Corporation (NDIC), revealed this during a press briefing in Lagos on Friday.

Nigeria's central bank has withdrawn the operating licence of ailing Skye Bank Plc, two years after removing the financial institution's management and board.

The apex bank said it has decided to establish a bridge bank 'Polarise Bank,' to secure the assets and liabilities of Skye Bank

 

Umar Ibrahim, chairman of the Nigeria Deposit Insurance Corporation (NDIC), revealed this in a press briefing in Lagos on Friday, alongside Godwin Emefiele.

 

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Emefiele said: “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”.

 

 

» more Nigeria's Central Bank Governor Godwin Emefiele speaks during the monthly Monetary Policy Committee meeting in Abuja, Nigeria May 22, 2018.  (REUTERS/Afolabi Sotunde)

“The result of our examinations and forensic audit of the bank  have revealed that the 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 said during the press briefing.

 

CBN took regulatory actions on Skye Bank Plc in 2016

In 2016, Nigeria's apex bank took over of Skye Bank Plc following persistent turkey to meet minimum thresholds in critical prudential and adequacy ratios.

 

The reasons also included the bank's huge non-performing loans (NPLs) profile as well as its low liquidity ratio.

 

ALSO READ: Nigerian banks illegally charged customers over N65 billion in 6 years

 

Godwin Emefiele, CBN Governor, had explained that the apex bank took a proactive step in order to save the health of the bank from further deteriorating.

Customers' deposits in safe hands

The Asset Management Company of Nigeria (AMCON) will capitalise the bridge bank and begin the process of sourcing investors to buy out AMCON.

 

 

Queue at a banking hall in Ngeria  (News360 info)

The CBN chief said: “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.”

 

What is a bridge bank - Polarise Bank

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.

 

The task of the bridge bank is to ensure seamless continuity of banking operations.

 

Recall that in 2011, the Central Bank of Nigeria also revoked the licences of three banks – Afribank, Spring Bank and Bank PHB and established Mainstreet Bank Limited, Keystone Bank Limited and Enterprise Bank Limited as bridge banks in their place.

https://www.pulse.com.gh/bi/finance/cbn-withdraws-skye-banks-license-secures-customers-deposit-id8887048.html

Albert Ulebe Posted on September 21, 2018 23:17

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Albert Ulebe

Commented on September 21, 2018 23:36

This is heartaching ...

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