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Published On: Mon, Sep 24th, 2018

‘Death’ of Skye Bank and CBN’s Rescue

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By Precious Nkem Ogbuenyi


In premium banking business, when dealing with depositors’ funds, utmost good care is a non-negotiable factor. The depositor has placed his/her money in a bank in trust and his worst nightmare is an inability to have access to those fund because of mismanagement on the bank’s part. Since the inception of the Central Bank of Nigeria (CBN), depositor protection has been one of its hallmark responsibilities amongst other financial duties. Nigerian banking history has proven that when proper banking management is taken lightly, the customers suffer the heaviest blow as an aftermath of the crisis that arise.

Over the years, the CBN has been proactive and diligent in regulating and sanitizing the banking sector. For instance, between 1994 to 2006, over 40 banks had their licences revoked and declared failed financial institutions. Within that period, the apex bank put in place some measures to mitigate the effects of such banking failures and forestall their reoccurrence.

It was thus a continuation of similar interventionist measures to stabilize the system that on Friday, 21st of September 2018, the CBN Governor, Mr. Godwin Emefiele announced in a press statement that Skye Bank Plc has been taken over by Polaris Bank, a bridge bank established by the CBN.

Some may worry that liquidation is the resulting effect of a takeover but that is far from what obtains. Takeover, as its name connotes, is a situation in which a company acquires another. This results in the acquiring company taking responsibility of all the target company’s holdings, debt, and operations.

In the Skye Bank scenario, the Asset Management Company of Nigeria (AMCON) capitalized Polaris Bank (the acquiring bank) and would begin the process of getting interested investors to buy out AMCON. Liquidation on the other hand is the process of winding up a company by realising its assets so the creditors/shareholders can be repaid. This method hardly looks out for the benefit of the ordinary depositors in a bank; the creditors and shareholders comes first. This is one of the reasons the CBN opted for a Takeover as against Liquidation of Skye Bank—to look out for the ordinary depositors too.

The Governor of CBN was also quick to quell the panic that may arise in any depositor’s mind. The Governor applied the soothing balm by assuring the bank’s depositors and other stakeholders that the doors of the bank would remain open to its customers with the members of staff still holding their jobs while the board and management shall be retained given their good performance in managing the bank’s crisis. This is a praiseworthy development in the banking industry of Nigeria. Critical establishments like the Nigerian Deposit Corporation (NDIC) and AMCON have been well marshalled by the apex bank as it enunciates policies and measures to ensure banking stability and the safety of depositors funds. Due to banks and other financial institutions monitoring, the CBN has been able to oversee and keep these institutions at par with the global banking best practices.

Dexterity, diligence and proactivism have been the guiding credo at the CBN under stewardship of Emefiele. Since 2014, the apex bank with the former Managing Director of Zenith Bank Plc at the helm has continued to keep the nation’s banking industry safe, stable and resilient. It is therefore not surprising that a unanimous vote has again elevated Godwin Emefiele as the Chairman of the West Africa Monetary Zone (WAMZ). That amply deserved honour bestowed on the unassuming technocrat precisely on 13th of September, 2018 is yet another milestone in Emefiele’s chequered run as Nigeria’s exemplary chief banker.

Back to Skye Bank, it is evident that its current death is no more than a friendly takeover which will purge it of its challenges and relaunch it for a robust new life. When our hardworking CBN governor gives assurance that there is no cause for alarm, you can take it to the bank.


Barrister Precious Nkem Ogbuenyi wrote from Jikwoyi,  Abuja. She can be reached via

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