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Title : Be Careful Of Polaris Bank, Nigerians Get Shocking Warning
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Be Careful Of Polaris Bank, Nigerians Get Shocking Warning

THE Central Bank of Nigeria is not totally honest with us and has not been since Skye Bank Plc was cobbled together from several banks which would not have qualified for licence when Professor Chukumah (formerly Charles) Soludo forced Banking “Con-soludo-tion” on the nation in 2005.

From almost 90 banks, when the former CBN Governor first announced the new banking policy, to the time the “mega-banks” which he told us will be big enough to compete globally, to the time the winners were announced in January 2006, the number of banks granted licence to operate shrank to about 25. In order to qualify, some banks had to go into mergers with others.

In some cases – Skye and Unity Bank for example — the mergers were literally forced on the stakeholders by the CBN as the only condition to remain in banking sector. Space will not permit for a detailed review of what transpired at the time and the consequences of “Con-soludo-tion” for those banks. But, Skye Bank Plc’s problems started from the first day. Like most shot-gun marriages, it was a marriage of many incompatible partners and a disaster waiting to happen.

Before the deadline for “Con-soludo-tion” was reached, the following warnings were given concerning the unusual haste attaching to the entire exercise. Enormous post-consolidation challenges face the 25 or 26 banks that will be operating from January 1, 2006 irrespective of whether they have achieved their current status by raising capital on their own or through acquisition of smaller banks or through mergers with other banks.

In fact the enormity of the problems they are likely to encounter is somewhat defined by the route they took to achieve the minimum capital base required by the Central Bank of Nigeria. In other words, those that are regarded as “stand alone”, to use the current slang, would suffer the least post-consolidation traumas.


Those who achieved the status through the acquisition of smaller banks by one big bank would experience more dislocations and those that arrived at the goal line through multiple mergers of several small or weak banks will have the worst post-consolidation problems. Skye Bank fell into the last group. This writer was not alone in advising caution.

Mr Atedo Peterside was among the bankers insisting on delay in implementation of the new banking policy. Professor Soludo, an economist who had never managed a bank, was adamant. So, on January 1, 2006, 25 banks deemed strong enough as a result of their bloated capital base started operations. Skye Bank was one of them.

Surprisingly, the bank had survived longer than some of its presumed superior rivals like Oceanic, Intercontinental, Bank PH etc – all of which went under by 2010 leaving their shareholders clutching tissue papers instead of shares.

It was a minor miracle that Skye Bank survived for so long. But, the seeds of destruction of banks like Oceanic, Intercontinental and Skye were sown from the day Soludo announced the deadline for banking reform.

Let us now turn to the defunct Skye Bank in order to see how the CBN under Mr Godwin Emefiele had been less than candid with the bank’s shareholders who were deceived and held on to the shares until it became valueless last week. Incidentally, the shareholders of former Skye Bank should really consider a class action suit against the CBN for the huge losses they have suffered collectively and individually as result of this avoidable disaster.

In September 2016, in an article titled SKYE BANK AS A METAPHOR FOR BANKING IN NIGERIA the following observations were made. Please read on. SKYE BANK AS A METAPHOR FOR BANKING IN NIGERIA. “Diezani’s ally, Omokore returns N200m to govt.”


Last month, when the Central Bank of Nigeria took out advertisements in several national newspapers to disclaim the “rumour” that Skye Bank was not distressed, an article appeared online titled WHY CBN AND LAGOS STATE MIGHT FAIL IN THEIR EFFORT TO SAVE SKYE BANK.

In it, the point was made that contrary to the position of the CBN and despite the vital interest of Lagos State in saving the bank, the efforts might end in failure because the bank had been undermined by its directors and managers in many ways, not just financial, which will make any rescue effort difficult – if not impossible.

By then a compilation of the list of cases heading for the courts and involving the bank had been made. It was frightening to observe how one bank could have so got itself involved in so many shady deals.

Today, I once more feel vindicated. But, my joy is not complete. The sad part of the unfolding story lies in the fact that the current Governor of the CBN and the directors of the bank could lie so brazenly to Nigerians as well as foreigners who had stake in Skye Bank. It was unprofessional and unethical conduct. Having deceived other parties about Skye Bank, they have floated another bank with the same sort of unbelievable assurances they issued with regard to Skye. Don’t believe Mr Emefiele or the CBN.

Believe me they are wrong again. Only a fool will deal with Polaris Bank Limited – the brainchild of an incompetent and perhaps compromised CBN. Two reasons are sufficient for everybody to reject the bank – until further notice. Polaris was the original name given to a submarine by the US Navy.

Perhaps, it was a mere coincidence that the CBN chose the name of an underwater vessel which comes up for air only suddenly and occasionally and can be lost without trace – taking all its crew with it.

This “submarine”too might disappear anytime soon. Polaris had been fashioned out of the wrecks of Skye and the new ship still has most of the people who drove the old one aground on board. Granted, they have a new Chairman, Managing Director etc.

But, those new hands are too few to change the culture of sleaze which had characterised Skye. Banks are not ruined only by corrupt directors. They are undermined by shady people working in branches and getting involved in the sort of escapades which turned Skye Bank belly-up.

Finally, very little is known about the new helmsmen. Who knows if they are not just as crooked as those who departed? And are they tough-minded enough to clean up the stench in the branches and at headquarters? Banking is all about trust.

For CBN which had disappointed Nigerians to be giving testimonials to Polaris must lead to the question: have they got it right this time? If not, Polaris might soon be replaced by Titanic bank – since they have introduced sea-going transport into the discussion. Just be careful about Polaris. I will not want to write another article saying “I told you so” a few years from now.

Just get out as fast as you can.

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