The Central Bank of Nigeria (CBN) and the Asset Management Company of Nigeria (AMCON), have jointly announced the completion of a Share Purchase Agreement (SPA) for the acquisition of 100 percent of the equity shares in Polaris Bank limited by Strategic Capital Investment Limited (SCIL).
KEY THINGS TO NOTE ON POLARIS BANK SALE
i. The share purchase Agreement was signed by the bank and strategic capital investment limited AND Approved by cbn and Amcon.
ii. Prior to the share sale,cbn invited offers from companies to bid for the sale of polaris bank.
iii. Prior to the share purchase, strategic capital investment limited had agreed to pay N50B naira upfront fee for the purchase of Polaris bank from ASSET MANAGEMENT COMPANY OF NIGERIA.
iv. In 2018 ,AMCON Appointed Polaris Bank to be a bridge bank following the revocation of the operating license of skye bank limited.
v. The appointment of Polaris bank was to cushion the effect of a failed bank. therefore, AMCON and CBN Agreed to inject 1.3 trillion naira to help the bank to continue in business.
vi. The new owners SCIL has up to 25 years to repay to the cbn the sum of 1.3trillion naira injected by cbn to keep Polaris bank Afloat.
CBN AND AMCON – The central bank of Nigeria has maintained the sale followed due process,and there are key achievement to be taken from the sale.
i. The bank now has new owners, and the management wishes to keep the staff and prevent job losses.
ii. The sale is also meant to prevent loss of depositor’s funds with the bank.
POLARIS BANK WAS A BRIDGE BANK TO FAILED SKYE BANK LIMITED
Recall in 2018,CBN appointed Polaris bank to take over the management of Polaris bank, after AMCON bought their debts, assets and liabilities . Under the new dispensation AMCON purchases a failing or failed bank assets and liabilities to Forstall the heavy impact of a failed bank on the depositors’ assets with the bank. The central bank of Nigeria had made some interventions at various times to save SKYE bank limited from failing but the problems continued unhindered.
In 2018, CBN finally revoked the operating license of skye bank limited and appointed POLARIS BANK to oversee the activities of Skye bank, pending the time new investors would be found.
The revocation was followed the purchase and assumption agreement by AMCON in 2018.
Hereinafter the central bank of Nigeria issued a new operating license to Polaris Bank Limited to conduct affairs as a bank in 2018.
The revocation of the operating license of skye bank limited was then followed by the injection of the sum of N900B by the central bank to Polaris bank Limited, to help it remain afloat.
In October 20th 2022, the central bank announced that the official sale of SKYE BANK LIMITED Known as POLARIS BANK to a new investor. The new investors are STRATEGIC CAPITAL INVESTMENT LIMITED.
VITAL KEY POINTS ON A BRIDGE BANK
- A bridge bank is a temporary bank set up by federal regulatory body such as cbn,ndic, to operate a failed or insolvent bank.
- A bridge bank is designated to operate the failing bank for A PARTICULAR number of years, until a buyer is found or the bank’s assets are liquidated.
- The bridge bank’s role includes among others administering the deposits and liabilities of the troubled bank, such as honoring financial obligations to avoid service interruptions for retail clients and continuing the service of loan commitments.
- Continuing Normal banking business of the failed bank, such as collection of deposits and other banking business from customers
- Bridge banks are to sue, defend matters involving the failed bank and recover assets for Amcon, the owner of the failed bank.
- Bridge bank are now the agents of the new owner of the failed bank.