(Business Intelligence) From Skye to Polaris Bank; Hard questions for CBN, NDIC
Whereas several Nigerians and mainly customers’ of Polaris Bank, formally Skye Bank may feel good based on the pronouncement of the Central Bank of Nigeria (CBN) while revoking its licence, not many could recall that it is the same apex bank that sacked the then management of Skye Bank Plc in 2016 and on it wisdom, appointed a new management team to run the bank.
Business Hilights Intelligence Unit (BHIU) recalls that on assumption of duties, the CBN-appointed new managers promised that all was well with Skye Bank and that they will turnaround the bank in one year or so.
Then, the CBN insisted then that Skye Bank was NOT in distress, that its regulatory intervention was merely to ‘protect depositors’ funds.’
The regulator explained then that its action became necessary because the bank had failed to meet key capital adequacy and liquidity ratios; injected N100 billion to shore up the liquidity of the financial institution and urged depositors to continue doing business with Skye Bank.
The depositors heaved a sigh of relief then and continued to do business with the bank without returning the initial N100bn.
As if Nigerians have forgotten, the same apex bank turned around on Friday last week and intervened again, but now, against itself considering the fact that it appointed the current management team which has failed to deliver on their promises on assumption of duties.
Observers say that was why CBN only revoked the licence without jettisoning the management team, rather the same failed team will again, administer the whooping N786bn.
Industry pundits who query the retaining of the same team that could not turnaround N100bn in new Polaris Bank and new logo means there is no lesson so far learnt by the apex bank after all.
Already, a statement signed by Mr. Adetokunbo M. Abiru and Muhammad K. Ahmad, Group Managing Director/CEO and Chairman, Polaris Bank Limited respectively read in parts saying, “Polaris Bank Limited shall continue to pay interest on all deposits in accordance with any deposit agreement formerly existing between each depositor and Skye Bank Plc. as at the date of assumption of such deposit by Polaris Bank Limited. In the event that Polaris Bank Limited seeks to make any changes to interest payable on any deposits, any such changes shall be notified in writing to each depositor and shall only take effect after a reasonable time following the giving of such notice.”
More trouble is that the authorities of the Nigerian Stock Exchange (NSE) on Friday officially notified the investing public that Skye Bank Plc shares would be suspended from trading on September 24. The exchange gave the notice in Lagos in a statement by Olumide Orojimi, head, corporate communications and Godstime Iwenekhai Head, Listings Regulations. NSE said in the statement that the action was taken following the recent regulatory action of the CBN revoking the banking license of Skye Bank.
Though checks around several Polaris Banks in Lagos showed continuity in service delivery, salient questions begging for answers from both the CBN and NDIC have emerged.
1, How solid is the present promise by the CBN and Polaris Bank Limited that ALL is well with the new Polaris Bank, which is merely a name change from the now defunct Skye Bank hence the old management appointed by the CBN are still in charge?
2, what is the meaning of the observed silence on the status of millions of shareholders of defunct Skye Bank? Are their investments gone because only depositors were assured of their money?
3, Given number one above, does the CHANGE of name and logo really determine the soundness or health of a bank or is this yet another ploy to keep worried customers from fleeing the bank for good before the roof finally crashes to the ground given past experience(s)?
4, if the injection of N100 billion in July 2016 could NOT keep Skye Bank afloat even for two years, what is the guarantee that the present bailout of N786 billion will do the magic?
Fourthly, was the size of bailout (N100bn in 2016 vs N786bn in 2018) the core issue?
5, if the CBN-appointed management did and were indeed doing a wonderful job in Skye Bank as the CBN chief (Godwin Emefiele) said last Friday, then why revoke the operating license of the bank?
Besides, is the revocation of Skye Bank’s license NOT a Vote of No Confidence on the management team assembled by the same CBN in 2016 to run Skye Bank?
7, if the CBN revoked the license of Skye Bank even under its own-appointed management team, then why retain the SAME management team to run the new Polaris Bank?
Pundits are upbeat that the ability of the CBN to figure out convincing answers to these critical questions will further assure Nigerians and banking investors that the current leadership of the apex bank is thinking aright.
