The Central Bank Of Nigeria (CBN) has been trying to sell Polaris Bank for quite some time now.
Hence, the Central Bank Of Nigeria and the Asset Management Company Of Nigeria(AMCON) on Thursday, October 20 announced the sales of Polaris Bank to Strategic Capital Investment Limited (‘SCIL’).
Many people do not know Polaris Bank was originally owned by Central Bank Of Nigeria after it was established on September 21, 2018 to offer commercial banking services.
Polaris Bank began work the same day after purchasing assets and assumed certain liabilities of the defunct Skye Bank.
After three (3) years of managing the bank as bridge financial services operator.
The CBN revealed the decision to transfer the bank’s assets to its new investor was jointly made with AMCON.
Although the sale was temporarily suspended by lawmakers, who showed concern on how much has already been put into the bank to revive it.
The House Of Representatives approved the sales of the bank after its investigation on Wednesday, 19 October, The House underlined the necessity of presidential approval and that the acquisition followed the established process.
Strategic Capital Investment Limited purchased 100% of the equity of Polaris Bank through the execution of a Share Purchase Agreement (SPA).
The CBN said in a statement authored by Osita Nwanisobi, Director of Corporate Communications, that SCIL had paid an upfront fee of N50 billion to purchase all of Polaris Bank’s equity.
Additionally, the business accepted the terms and conditions, which call for the full payback of N1.305 trillion, which includes the face value of the N898 billion in bonds used as consideration that AMCON injected into the insolvent bank, to be paid back over a 25-year period.
The CBN action to revoke the licence of the shuttered Skye Bank included this.
In order to save the bank from failure, safeguard depositor funds, avoid job losses, and maintain systemic financial stability.
As a result, the CBN not only made sure that all of the money that was initially granted to support the intervention gets recovered but also obtained an immediate return for the value it had built in Polaris Bank during the stabilisation phase.
The CBN Governor, Godwin Emefiele, was also quoted as saying the sale marks the completion of a landmark intervention in a strategic institution in the Nigerian banking sector by the CBN and AMCON.
He further said,
“We commend the outgoing board and management for their vital role since the bridge bank was established; in stabilising the Bank’s operations, its balance sheet and implementing strong governance structures to address the issues that led to the intervention.
This process has provided the CBN with an unprecedented opportunity to recover its intervention funds in full and promote financial stability and inclusive growth. We wish SCIL well as they implement growth plans to build the bank from the strong foundations that have been established.”
Consequently, Strategic Capital Investment Limited (SCIL) has become the new owners of Polaris Bank among the various parties who expressed interest in buying Polaris bank.
The SCIL bid was found to be the most thorough technical and financial purchase proposal, as well as the one with the highest rated expansion plans for Polaris Bank, after the financial and technical proposals of the various parties were examined.
Will SCIL lead the bank into a financially stable company?
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