CBN, AMCON sell Polaris Bank to new investor, SCIL

THE Central Bank of Nigeria (CBN) and the Asset Management Company of Nigeria (AMCON) have announced the sale of Polaris Bank to its new investor, Strategic Capital Investment Limited (SCIL).

The announcement, contained in a press release signed by CBN’s director of corporate communications, Osita Nwanisobi, on October 20, 2022, said the new investor agreed to pay the sum of N1.3 trillion over a 25-year-period, being the value of the embattled bank’s debts.

“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) 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 statement read.

The apex bank announced that the new investor had paid an upfront consideration of N50 billion to acquire 100 per cent of the equity of Polaris Bank. It added that it has also accepted the terms of the agreement, which include the full repayment of the sum of N1.305 trillion liabilities in the years to come.

The CBN stated that the agreement showed it has received an immediate return for the value it created in Polaris Bank during the stabilisation period, as well as ensuring that all funds originally provided to support the intervention were recovered.

The apex bank said the sale was coordinated by a Divestment 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. In the process, 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. 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,” the statement read in part.



    It also stated that 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.

    The CBN Governor, Godwin Emefiele, was quoted to have said, “This sale marks the completion of a landmark intervention in a strategic institution in the Nigerian banking sector by the CBN and AMCON.

    Emefiele said, “We commend 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. This process has provided the CBN with an unprecedented opportunity to recover its intervention funds in full and promote financial stability and inclusive growth.”

    Emefiele wished SCIL well, with the hope that it would implement
    growth plans to ensure the bank is built from the strong foundations that have been established.

    Experienced Business reporter seeking the truth and upholding justice. Covered capital markets, aviation, maritime, road and rail, as well as economy. Email tips to [email protected]. Follow on Twitter @theminentmuyiwa and on Instagram @Hollumuyiwah.

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