Nigeria's central bank has revoked Skye Bank's operating licence and a bridge bank called Polaris has been created to take over the lender's assets, the financial regulator said on Friday. Isaac Okorafor, a central bank spokesman, said state-run bad bank the Asset Management Corporation of Nigeria (AMCON) had injected 786 billion naira ($2.57 billion) into Polaris. He said AMCON owns 100 percent of Polaris and it would be sold to investors.
The central bank shored up the mid-tier lender in 2016 with a 100 billion naira capital injection after sacking its top management for failing to meet minimum capital requirements. It then appointed a new management team. Last year the central bank extended its guarantees to Skye Bank for another year while considering the bank's recapitalisation proposal.
Central Bank of Nigeria (CBN) Governor Godwin Emefiele said a forensic audit revealed the bank required "urgent recapitalisation as it can no longer continue to live on borrowed time with indefinite liquidity support from the CBN".
"The shareholders of the bank have been unable to recapitalize it," said Emefiele in an emailed statement in which he said the strategy was for AMCON to recapitalize the bridge bank and source investors. "By this decision, the licence of the defunct Skye Bank is hereby revoked," he said.
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