CBN, AMCON announce sale of Polaris Bank

The Central Bank of Nigeria, CBN and the Asset Management Company of Nigeria, AMCON have formally announced the completion of a Share Purchase Agreement (SPA) for the acquisition of 100percent of the equity in Polaris Bank by Strategic Capital Investment Limited (‘SCIL’).

This is even as the House of Representatives on Wednesday okayed the sale of Polaris Bank, noting that the acquisition followed the laid down procedure and the relevant presidential approval.

A statement issued by the Director, the Corporate Communications Department of CBN, Osita Nwanisobi, on behalf of the CBN and AMCON disclosed that SCIL had paid an upfront consideration of N50 billion to acquire 100% of the equity of Polaris Bank and had also accepted the terms of the agreement which include the full repayment of the sum of N1.305 trillion, being the consideration bonds injected.

According to the statement, “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.

Meanwhile, the CBN Governor, Mr Godwin Emefiele, was quoted as saying that the sale of the bank “marks the completion of a landmark intervention in a strategic institution in the Nigerian banking sector by the CBN and AMCON.”

He commended the outgoing board and management for their vital role since the bridge bank was established; in stabilising the Bank’s operations, and its balance sheet and implementing strong governance structures to address the issues that led to the intervention.

According to the Governor, the process has provided the CBN with an unprecedented opportunity to recover its intervention funds in full and promote financial stability and inclusive growth. He wished SCIL well as they implement growth plans to build the bank from the strong foundations that have been established.”

It will be recalled that Polaris has been operating as a bridge bank since 2018 when the Central Bank of Nigeria intervened to revoke the licence of the former Skye Bank Plc and established Polaris Bank to assume its assets and certain liabilities.

As part of the CBN intervention, consideration bonds with a face value of N898 billion (future value of N1.305 trillion) were injected into the bridge bank through AMCON, to be repaid over a 25-year period. The Bank noted that the actions were taken to prevent the imminent collapse of the bank, enable its stabilisation and recovery, protect depositors’ funds, prevent job losses and preserve systemic financial stability.

Speaking on the acquisition on Wednesday, October 19, 2022, the chairman of the Ad-hoc Committee investigating the sale of Polaris Bank, Hon. Henry Nwawuba said that the lawmakers during the scrutiny of various documents and extant regulatory processes on the sale of the bank discovered that there was evidence of substantial compliance with the process.