Tag Archives: Polaris Bank

How poor corporate governance blew away N2trn assets of SKYE BANK

From Skye Bank to Polaris Bank: How poor corporate governance blew away N2trn assets of SKYE BANK

The Nigerian Stock Exchange, NSE has notified the investing public that the shares of Skye Bank Plc will be suspended from trading on the floor of the Exchange effective Monday, 24 September 2018.

According to statement by the bank : “This action is taken following the recent regulatory action of the Central Bank of Nigeria, CBN, revoking the banking license of Skye Bank and in exercise of the powers of The Exchange pursuant to the Rules on Suspension of Trading in Listed Securities, Rulebook of The Exchange (Issuers’ Rules).” The Exchange, however, did not say what becomes of the fate of the equity investors rather, it merely said, “further developments will be communicated as appropriate in due course.“ Just before CBN anniunced the take over , investors on Friday traded 2,931,537 volume of shares of Skye Bank in 47 deals at N0.77 per share, while the volume of shares traded for the 5 days trading last week stood at 52, 486.693 units valued at N34,339,324.77.

Shareholders kick But the regulatory actions have not gone down well with the investors, especially the retail investors whose investments have been torpedoed.

They have told Financial Vanguard that a joint counter-action against the actions of the regulatory authorities would be underway. National President, Constance Shareholders’ Association of Nigeria, Shehu Mallam Mikail, who spoke the minds of their shareholders told Fianancial Vanguard that the action taken by CBN on Skye Bank was tantamount to a system of mafias against voiceless retail shareholders’ which will erode the confidence of investors in the capital market and which is likely to effect the economy. Noting that it was the same CBN that appointed the interim board and management since 2016 till date and extended their tenure for next two years without coming out to call for a meeting with shareholders to brief them of their stewardship till date. The apex bank, while announcing the takeover of the bank last weekend, said the action was neces
sitated by the shareholders’ inability to recapitalize the bank. But Mikail disagreed with the apex bank stating: “The CBN is now saying the bank need recapitalisation, have they ever asked shareholders to recapitalise the bank?, which is capital no”, and as at the close of market today (last Friday) the stocks were traded, now what kind of regulation is this in Nigeria where an action can be taken without due process and what signal are our regulators portraying to the world?

“Then, there is no interrelation of information within regulators for shareholders to be able to take action that is likely to save their interest.

“This action by CBN is to show that we do not have government which can protect the economy and this is just a slap on the face of shareholders and we will not take it lightly with all bodies concerned. We will challenge the actions”. Another section of shareholders, Progressive Shareholders Association of Nigeria, PSAN, while wondering why the apex bank did not sack the board and management after it had literally indicted them, also lamented the plight of the ordinary investors in the bank. National Coordinator, Mr. Boniface Okezie, stated: “Now that CBN has taken over the bank, it ought to have sacked both Board and Management and reconstitute a new Board and Management.” He stated further: “This action of interfering and taking over of banks by the CBN will result to distortion in the capital market and banking sector and as well send wrong signal to investors.
“Why should investors always bear the brunt when CBN intervenes and take over banks? Is it a crime for shareholders to invest in banks?

I think CBN should henceforth refrain from interfering in shareholders matters. “I can assure you that shareholders are determined to speak with one voice and take up the CBN.

Although we are in court already over the acquisition of Afribank and others, and we are willing to challenge this fresh illegality by the CBN in the court of law.” Okezie further maintained that shareholders groups will rally all other stakeholders in the bank to challenge the decision of the CBN and other sister agencies and ensure that “justice is not only done but seen to be done on the matter.” Our dilemma, by shareholders Founder of Noble Shareholders Association, Gbadebo Olatokunbo, said that the withdrawal of the license by the CBN has added to the dilemma shareholders faced with sale of nationalised banks. Olatokunbo stated: “While retail investors were still grappling with the loss of investment, occasioned by the global financial crisis, they were faced with the dilemma arising from the sale of the three nationalised banks, Bank PHB now Keystone Bank, Afribank which became Mainstreet Bank and Enterprise Bank and now, this one.

“These are the things discouraging local investors. CBN should hold the directors of the bank responsible; they should not allow shareholders suffer the way they did when the other three banks were nationalised. “I wonder what will be the fate of shareholders. It is a big disappointment; I am just going through my holdings to know how much I have there. The directors of the bank must be made to pay for this. “It’s high time regulatory agencies start dealing with offenders, instead of companies, because companies couldn’t operate herself, some people refused to observe the rules for their selfish desires and they should be the ones to be punished and not the companies or the shareholders, after all the CBN approved their appointments, before the shareholders endorsed at AGMs (Annual General Meetings).

‘Hold directors responsible’ “The Directors of Skye Bank must be held accountable, their properties should be sold to offset the debts and not the ordinary shareholders that entrusted the companies to them.” Patrick Ajudua, National Chairman, said: “As usual, the minority shareholders are at the losing end. We have to acknowledge that the primary function of CBN in this instance is protection of depositors. Therefore, they don’t have any obligation to the shareholders; it falls within the power of SEC (Securities and Exchange Commission) to protect investors in the capital market, particularly they minority shareholders.” Continuing, Ajudua said: “The CBN contributed to this. The CBN knowing fully the situation with Skye Bank allowed it to purchase Mainstreet Bank. “When Skye Bank was taken into the CBN intensive care unit, it continued to prescribe the wrong diagnosis by continuously granting the bank access to its lending widow. It is when the bank is in a state of coma that the CBN removed the life support machine and pronounced it dead.

“Tell me why the minority shareholders should suffer for sins committed by the Board and Management of the bank. Are we (the ordinary shareholders) the ones that granted the non performing loans. Are we the cause of regulatory failures on the part of CBN, NDIC, NSE and SEC,” he queried. Founder of Noble Shareholders Association, Gbadebo Olatokunbo, said that the withdrawal of the license by the CBN has added to the dilemma shareholders faced with sale of nationalised banks. Olatokunbo stated: “While retail investors were still grappling with the loss of investment, occasioned by the global financial crisis, they were faced with the dilemma arising from the sale of the three nationalised banks, Bank PHB now Keystone Bank, Afribank which became Mainstreet Bank and Enterprise Bank and now, this one. “These are the things discouraging local investors. CBN should hold the directors of the bank responsible; they should not allow shareholders suffer the way they did when the other three banks were nationalised. “I wonder what will be the fate of shareholders.

It is a big disappointment; I am just going through my holdings to know how much I have there. The directors of the bank must be made to pay for this. “It’s high time regulatory agencies start dealing with offenders, instead of companies, because companies couldn’t operate herself, some people refused to observe the rules for their selfish desires and they should be the ones to be punished and not the companies or the shareholders, after all the CBN approved their appointments, before the shareholders endorsed at AGMs (Annual General Meetings).

Polaris Bank committed to improved service, customers, says CEO

Polaris Bank committed to improved service, customers, says CEO

Polaris Bank Limited Group Managing Director/Chief Executive Officer, Tokunbo Abiru, has pledged the commitment of the new bank to deliver on its mandate to all stakeholders, even as he expressed appreciation to customers for their patronage, support and loyalty.

Abiru who stated this on a breakfast feature at the weekend, also assured customers of the old Skye Bank saying “our customers are in for a better deal with Polaris Bank”.

“Polaris is a new chapter, we are stable and alive. With strong, capitalization, liquidity, strong management and clean loan books with adequate capitalization which are key indices for a healthy banking institution, the future could only be brighter for all our stakeholders.

Predicting the future of Polaris, Abiru said: “our future will be hinged on strong corporate governance and with robust business operations, we’d build and enhance a sustainable enterprise that would be the pride of every stakeholder.”

The new bank comes into operation with the injection of a massive N786 billion by the Nigeria Deposit Insurance Corporation (NDIC) on Friday, September 21, 2018.

Polaris also retains the experienced management team that helped repose public confidence in the old Skye Bank.

In recognition of his and team’s sterling performance, CBN had retained Abiru and his team and as a matter of fact, extended another two-year mandate. He currently remains the Group Managing Director of Polaris Bank.

“‘This means whatever money customers had in Skye Bank remains same in Polaris bank. The only difference is the name change and investors coming on board with fresh funds into a bridge institution’’ an industry source educates.

Central Bank Governor, Godwin Emefiele in a statement on Friday, September 21, 2018, confirmed the safety of customers’ and depositors’ funds. The statement by the regulatory CBN also confirmed that ‘’the existing Board, Management and Staff of the defunct Skye Bank has been retained for its good performance’’.

Meanwhile, the NDIC, commenting on Polaris, said as Deposit Insurer, it acted to ensure the continued safety of depositors’ funds in furtherance of the regulatory authorities resolve to proactively manage potential threats to financial system stability.

In a statement issued by the regulator at the weekend, it assured depositors and customers of the defunct SKYE Bank PLC that their deposits are safe and hereby encourages them to continue to transact their normal banking business with POLARIS Bank

Also, an erstwhile customer of the defunct Skye, now Polaris, Wale Adedipe has expressed optimism that the new bank would meet expectations of stakeholders “as it is in good hands”.