The financial sector regulatory authorities decided to adopt the bridge bank option in resolving the Skye Bank crisis to protect depositors’ funds and employees in the now defunct bank.
The Central Bank of Nigeria (CBN) on Friday approved the revocation of the operating license of Skye Bank, replacing it with Polaris Bank Limited, to ensure normal banking transactions are not disrupted.
The new bank, which is to commence business immediately, will take over the assets and liabilities of the now rested Skye Bank and continue to transact businesses from where its predecessor stopped.
To make certain that the interest of former customers and depositors in Skye Bank were fully protected, the financial sector insurer, the Nigerian Deposit Insurance Corporation (NDIC), said the successor bank, Polaris, and the customers of Skye Bank remain insured under the NDIC Act.
The NDIC spokesperson, Mohammed Ibrahim, said in a statement the adoption of the bridge bank model was equally to guarantee that most of the Skye Bank employees will not lose their jobs.
“The NDIC, as Deposit Insurer, acted to ensure the continued safety of depositors’ funds in furtherance of the regulatory authorities resolved to proactively manage potential threats to financial system stability,” Mr Ibrahim said.
In announcing the revocation of the Skye Bank license on Friday, the CBN governor, Godwin Emefiele, said the board and management shall be retained given their good performance.
Prior to the decision to revoke the Skye Bank license, the CBN governor said since 2016 the bank had been under the regulatory radar of the apex bank after it discovered some “unacceptable corporate governance lapses as well as its persistent failure to meet minimum thresholds in critical prudential and adequacy ratios”.
The shortcomings of the bank, the CBN governor said, culminated in the bank’s permanent presence at the CBN lending window.
On July 4, 2016, Mr Emefiele said the CBN took a regulatory action which led to the resignation of the chairman of Skye Bank, Tunde Ayeni, along with the Group Managing Director/ Chief Executive Officer, Timothy Oguntayo, and all Non-Executive Directors on the Board and the two longest-serving Executive Directors on the management team.