Governor of the Central Bank of Nigeria, Dr Godwin Emefiele, has reiterated the main reason behind the decision to change Skye Bank Plc’s name to Polaris Bank Limited; emphasising that it was not for ‘sexy reasons’.
Dr Emefiele made this known today in Abuja while speaking to journalists at the end of the Monetary Policy Committee (MPC) meeting. He said the name change was for legal reasons.
According to him, the CBN and the Federal Government have invested close to N800 billion in the bank. As such, its name had to change in order to reflect ownership structure.
“Having gotten to a point where the Central Bank of Nigeria and the Federal Government has invested close to N800 billion in this bank, at some point, it had to be seen to be owned by the CBN until we find investors that will be willing to pay a fair price for the business. That is the compelling reason the name had to change.
So, we did not just give the bank a sexy name. The name had to be changed for legal reasons.” -Emefiele
Explaining further, Emefiele recalled that two years ago Skye Bank’s entire share capital was in negative territory because of Non-Performing loans. The situation deteriorated after a recent forensic audit conducted on the bank.
This was why the CBN decided to make its recent move of withdrawing the bank’s operating license.
Majority shareholders have lost their money…
Meanwhile, Dr Emefiele went further to state that all majority shareholders in the defunct Skye Bank have lost their investment. However, arrangements are being made to offer some protection to retail investors; although their shareholdings will ultimately be substantially whittled down.
“If taxpayers’ money would be invested in this bank, there is a need to let shareholders know (particularly those considered to be majority shareholders), that they’ve lost their investment. We will try to ensure that retail investors are protected under some arrangement, but notwithstanding that their holdings will be substantially whittled down.” -Emefiele
He concluded by saying that the strategic health of the banking industry remains strong and the CBN is constantly working to ensure that banks are not liquidated.