Story by Olabode Jegede
The Nigerian Stock Exchange (NSE) on Wednesday announced the delisting of Skye Bank plc and Fortis Microfinance Bank Plc from its daily official trading list over poor corporate governance that rock both institutions.
According to NSE, “the pursuant to Clause 15 of the General Undertaking, Appendix III of the Rule Book of The Nigerian Stock Exchange, 2015 (Issuers Rules), the under listed companies were delisted from the Daily Official List of The Nigerian Stock Exchange (The Exchange), Wednesday, August 21, 2019:
“The delisting of the afore-listed companies was approved by the National Council of The Exchange on Thursday, 30 May 2019 in line with The Exchange regulatory delisting process as a result of the revocation of their operating licenses by their primary regulator, the Central Bank of Nigeria.”
In September 2018, the CBN sacked the management of Skye Bank and the Nigeria Deposit Insurance Corporation (NDIC), Asset Management Corporation of Nigeria (AMCON) were invited to inject a total sum of N898.45 billion as capital thereby leading to the emergence of another bridged bank named Polaris Bank Limited.
The intervention in Skye Bank was caused majorly by internal abuse by the operators.
As a result of that development, AMCON’s total debt obligation to the CBN, is currently in excess of N6 trillion.
The Governor, CBN, Mr. Godwin. Emefiele had said, “You will recall that on 4th July 2016, we took a regulatory action on Skye bank Nigeria. Specifically, this action led 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
“At that time the proactive action was informed by unacceptable corporate governance lapses as well as the persistent failure of Skye Bank to meet minimum thresholds in critical prudential and adequacy ratios, which culminated in the banks permanent presence at the CBN Lending Window.
“The focus of the 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 our intention was also to stem the imminent job losses to staff if a liquidation option had been adopted. These objectives have been fully achieved and the bank has been able to meet customer obligations, having curtailed the liquidity haemorrhage and restored depositor confidence.
“Indeed, the banks performance has improved considerably compared to the pre-July 2016 era.
“The result of our examinations and forensic audit of the bank has, however, 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 recapitalize it.
“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. The strategy is for the Asset Management Company of Nigeria (AMCON) to capitalize the Bridge Bank and begin the process of sourcing investors to buy out AMCON. By this decision, the licence of the defunct Skye Bank is hereby revoked.
“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.
“Thus, all customers of Skye Bank shall be automatic customers of the new bank and their accounts and records duly purchased by Polaris Bank.
“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 any employee decides to opt out.
“We wish to assure the general public that the Nigerian banking industry remains safe and resilient and that the CBN will continue to live up to its responsibilities of promoting stability in the banking and financial system.”