The Central Bank of Nigeria (CBN) has announced the sale of Polaris Bank to a new core investor, Strategic Capital Investment Ltd (SCIL) for N50 billion.
This was disclosed in statement signed by Mr Osita Nwanisobi, Director, Corporate Communications and posted on CBN website.
The House of Representatives approved the sale of the bank on Wednesday, noting that the acquisition followed established protocol and received the necessary presidential approval.
Since the Central Bank of Nigeria intervened in 2018 to revoke the license of the former Skye Bank Plc and establish Polaris Bank to take over its assets and some of its liabilities, Polaris has been operating as a bridge bank.
What the CBN is saying
The release said, “The Central Bank of Nigeria (CBN) and the Asset Management Company of Nigeria (AMCON) are pleased to announce the completion of a Share Purchase Agreement (SPA) for the acquisition of 100% of the equity in Polaris Bank (‘Polaris’ or ‘the Bank’) by Strategic Capital Investment Limited (‘SCIL’).”
The banks added that “As part of the CBN intervention, consideration bonds with a face value of N898 billion (future value of N1.305 trillion) was injected into the bridge bank through AMCON, to be repaid over a 25-year period. These actions were taken to prevent the imminent collapse of the bank, enable its stabilisation and recovery, protect depositors’ fund, prevent job losses and preserve systemic financial stability.”
The CBN stated that “SCIL has paid an upfront consideration of N50 billion to acquire 100% of the equity of Polaris Bank and has accepted the terms of the agreement which include the full repayment of the sum of N1.305 trillion, being the consideration bonds injected.”
The CBN thus received an immediate return for the value it has created in Polaris Bank during the stabilisation period, as well as ensuring that all funds originally provided to support the intervention are recovered.
Commenting on the transaction Mr. Godwin I. Emefiele, Governor of the Central Bank of Nigeria said: “This sale marks the completion of a landmark intervention in a strategic institution in the Nigerian banking sector by the CBN and AMCON. 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.”
