Nigeria’s Central Bank confirms successful sale of Polaris Bank

This follows the House of Representatives’ confirmation of the acquisition process on Wednesday, indicating that it followed laid down procedures and got the relevant presidential approval.

A statement issued by the Director, Corporate Communications Department of the Central Bank of Nigeria, 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.

Nwanisobi added that the sale was coordinated by a Divestment Committee (the ‘Committee’) comprising representatives of the CBN and AMCON, and advised by legal and financial consultants.

“The Committee conducted a sale process by ‘private treaty’, as provided in Section 34(5) of the AMCON Act to avoid negative speculations, retain value and preserve financial system stability,” he noted.

Furthermore, “parties who had formally expressed an interest in acquiring Polaris Bank, subsequent to the CBN intervention in 2018, were invited to submit financial and technical proposals.”

According to the CBN, invitations to submit proposals were sent to 25 pre-qualified interested parties, out of which three (3) parties eventually submitted final purchase proposals following technical evaluation.

“All submissions were subject to a rigorous transaction process from which SCIL emerged as the preferred bidder having presented the most comprehensive technical/financial purchase proposal as well as the highest rated growth plans for Polaris Bank,” the statement added.

Meanwhile, the CBN Governor, Mr. Godwin Emefiele, said 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, 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 Bank 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) was 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’ fund, prevent job losses and preserve systemic financial stability.

Speaking on the acquisition, 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 process on the sale of the bank, discovered that there were evidences of substantial compliance with the process.