Skye Bank has seized to exist after if could not weather the storm that had hit it since 2016.

The bank's licence was revoked on Friday by the Central Bank of Nigeria (CBN) which also announced the establishment of a bridge bank, Polaris Bank, that will now assume the assets and liabilities of Skye Bank.

The Governor of the Central Bank, Mr Godwin Emefiele, announced the the development on during a news conference in Lagos. 

He said the decision was reached following the inability of the owners of the bank to shore up the capital of the distressed bank which had earlier received a 350 billion Naira intervention in July 2016.

Since 2016, there have been messages circulating that have created panic, declaring the bank distressed and dead. 

Such fear has now been laid to rest, as the CBN Governor said: "Skye Bank requires urgent recapitalisation as it can no longer continue to live on borrowed times with indefinite liquidity support from the CBN.

"We have decided to establish a bridge bank, Polaris Bank, to assume the assets and liabilities of Skye Bank.

"The strategy is for AMCON to capitalise the bridge bank and begin the process of sourcing investors to buy out AMCON.

By this decision the licence of Skye Bank is hereby revoked".

Also, the management of the distressed Skye Bank would be retained to continue to manage the newly licensed Polaris Bank.

According to the CBN Governor they are being retained considering their good performance.

Emefiele also said that based on the discussion with the Nigerian Stock Exchange, the shares of the distressed Skye Bank would be suspended from trading on the capital market until discussions are concluded.

The shares had gained 4.05 per cent to reach 77k on Friday.

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The CBN took over Skye Bank Nigeria Plc on July 4, 2016 and the action led to the resignation of the Chairman, all Non-Executive Directors on the Board as well as the Managing Director, Deputy Managing Director, and the two longest-serving Executive Directors on the Management Team.

'No Loss Of Deposit Or Job'

With the takeover of the bank by the CBN and the Nigeria Deposit Insurance Corporation (NDIC), the bridge bank, Polaris Bank, will be getting a single digit interest long term facility of 786 billion Naira from the Assets Management Corporation of Nigeria (AMCON).

Also, the Managing Director and Chief Executive of NDIC, Mr Umaru Ibrahim, said the option of a bridge bank was to ensure that the depositors of the bank were taken care of and deposits were not lost.

Ibrahim said that the bridge bank would also ensure that there would be no job losses as Polaris Bank would retain all staff of the distressed bank under a new contract.

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Skye Bank Plc which has now become Polaris Bank was a product of the merger of five legacy banks as a result of the banking industry consolidation and recapitalisation exercise of 2005.  

The legacy banks were Prudent Bank Plc, EIB International Plc, Bond Bank Limited, Reliance Bank Limited and Co-operative Bank Plc.

Following the merger, the bank opened  three West African subsidiaries in  Sierra Leone, Gambia and Guinea.

In 2014, the bank won the bid to acquire the 100 per cent ownership stake of Asset Management Corporation of Nigeria (AMCON) in Mainstreet Bank Limited, a deal which made Skye Bank one of the top four banks in Nigeria. But the move, may also have undermined its books as the bank was taken over by the CBN in 2016.

The defunct bank  is quoted on the Nigerian Stock Exchange (NSE) with over 450,000  shareholders.

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