The Central Bank of Nigeria (CBN) yesterday gave additional insights of the various regulatory steps it took to appraise the state of the defunct Skye Bank Plc, before finally changing its name to Polaris Bank, a few days ago.
The apex bank governor, Godwin Emefiele, who briefed journalists at the end of the Monetary Policy Committee (MPC) two-day meeting on various aspects of the economy and final decision was taken by the committee to retain the MPR at 14 percent, said that despite the latest decision on the bank, the Nigerian banking system remained “sound and healthy.”
According to him, the CBN in furtherance of its statutory roles is constantly monitoring developments in the banking system with a view to ensuring that challenges of lenders are identified and tackled and by so doing, protecting the interest of all stakeholders in the banking system.
He explained: “In every chain, there will always be strong points and weak points in a chain, but what we will continue to do is to make sure that that chain remains strong in all aspects of it. Notwithstanding that, as we see areas where there are weaknesses, we will do everything possible to make sure that we keep the chain linked together, and that is what we did with Skye Bank.
“As I have said before, I will love to see a situation where banks are not liquidated, that we have to think outside the box to see how much we can ensure that we have more banks in the country than have less number of banks in the country, and that is what we are doing”, Emefiele stressed.
Specifically, the governor recalled that the situation with Skye Bank, as we all know, was that as at two years ago when the news broke that the bank had slided into negative capital as a result of Non-Performing Loan, the apex bank compelled the entire board and executives to resign and they did.
He clarified further: “After that, before we conducted an internal audit, the hole (financial gap) was about N370bn. After the forensic audit, it came to the level it is today, which is almost about N800bn.
“So, what we did was to say that having established a hole at this level, taxpayers’ money will be invested in this bank as a loan. So, we decided that there is a need to let shareholders know, particularly those that have lost their investments; we will try to make sure that small investors remain protected.
“It is for this reason that the name had to be changed for legal reasons. Having got to the point where the Central Bank of Nigeria has invested close to N800bn in this bank, at some point it must be seen to be owned by the CBN until we find investors that can pay a fair price for the bank”, the top banker added.
Again, Emefiele re-assured depositors that their funds in the bridge institution, Polaris Bank, remained safe and that CBN would ensure that its over 5,000 workers are not sacked.
