Juliet Akindele,
Abuja
Nigerians were yesterday, Wednesday, August 2, slapped with the news that Polaris Bank had been sold for N40b by the Central Bank of Nigeria (CBN) to one Alhaji Auwal Gombe, a businessman and an inlaw to the former military president, General Ibrahim Badamosi Babangida (rtd).
Like wildfire, the news that the bank was rescued to the tune of N1.2 trillion after it was almost distressed, circulated without control and as if someone somewhere was interested in creating unnecessary panic for the bank’s depositors.
The viral reports circulated looked like it was deliberately targeted at embarrassing the financial institution and its management whom many had acknowledged as finding its feet after a long time.
Typically, a lot of people reacted with awe, as they pondered on the safety of the funds in the bank which had transisted from Skye Bank before eventually becoming what it is today, Polaris Bank, courtesy of an intervention fund from the federal government via the Assets Management Corporation of Nigeria (AMCON).
One fact that those behind the story failed to realize remains that Polaris Bank had always been opened for sale having been an intervention bank. Like Skye Bank and Mainstreet Bank, the financial institutions failed to meet the cash liquidity ratio set by the regulator and ended up going to the Central Bank discount window to borrow.
However, when they reach their borrowing limit and became insolvent, they are eventually taken over by AMCON and ended up on the shelve waiting for anyone interested in buying.
The sales of Polaris Bank date back to 2019. Speaking with Reuters in 2019, Jude Nwauzor, the spokesperson of AMCON said that AMCON had begun plans for the sales of the bank, adding that the move would be perfected after the general elections in February.
Then, Nwauzor said the corporation was taking stock of the bank’s assets ahead of the sale, adding that it is being impeded by the election activities.
“The election season has slowed down things,” the AMCON spokesperson was quoted as saying. “We would advertise for expressions of interest from investors after elections and commence the sale process,” he said.
It was the same situation with Enterprise Bank which was sold by AMCON to Heritage Bank and Bank PHB which eventually became Keystone Bank.
As such, anyone seeking to announce that the Polaris bank has been sold by CBN for N40b either does not understand the workings of AMCON or has been living in limbo because it is simply a known fact that the bank would be sold as soon as the only owners of the bank AMCON divest and the right investors are found.
Weird, however, is the figure which has been bandied around as the sales price of the bank. N40b is hardly the annual balance sheet of some micro-finance banks and to claim that the bank was sold for such an outrageous and paltry amount is either a lack of understanding of the working of such transactions or complete ignorance.
Akindele, a social commentator writes from Abuja.
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