The Central Bank of Nigeria (CBN) and the Asset Management Company of Nigeria (AMCON) have announced the sale of Polaris Bank.
What’s the sale worth?
The announcement followed the completion of a Share Purchase Agreement (SPA) for the acquisition of 100% of Polaris Bank’s equity by Strategic Capital Investment Limited (‘SCIL’). The CBN’s Director of Corporate Communications, Osita Nwanisobi, in a statement on behalf of the CBN and AMCON, disclosed that SCIL had paid an upfront consideration of N50b to acquire 100% of Polaris Bank’s equity and also accepted the terms of the agreement which include the full repayment of the sum of N1.305t, being the consideration bonds injected.
What motivated the sale?
The CBN had, in an intervention in 2018, revoked the license of the then Skye Bank Plc and established Polaris Bank to take over its assets and some of its liabilities. Polaris has been operating as a bridge bank since then. Consideration bonds with a face value of N898b (future value of N1.305t) and a 25-year repayment period were put into the bridge bank as part of the CBN intervention. The CBN highlighted that the measures were implemented to stop the bank’s impending collapse, enable its stabilization and recovery, safeguard depositors’ funds, avoid job losses, and maintain systemic financial stability.
According to the statement, parties who formally expressed interest in acquiring the bank, after 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. The sale was approved by the House of Representatives on Wednesday.