Divestment: Analysts commend Polaris Bank Management, say Bank about to unleash full potentials
The news of 100% divestment of government ownership in Polaris Bank and subsequent announcement of a new Core Investor, Strategic Capital Investment Limited (SCIL) has been met by optimism and positive growth trajectory forecast for the Bank by financial Analysts and Pundits.
According to them, prior to the divestment, the Bank was not performing badly going by its published financial records from its first year of operation as a bridge Bank and therefore people should expect the best now that the Bank will be operating solely as an independent entity.
“When Polaris Bank replaced the defunct Skye Bank in September 2018, people had their fears. But in less than four years, the Bank not only rebound but became a stronger player in Nigeria’s banking sector. The profit is good and one can without doubt, say the Bank is healthy. Now that new investors are coming on board, we can only expect and see Polaris Bank unveil its best potentials. Kudos to the management of the Bank for not failing the FG, CBN, NDIC, AMCON and indeed the customers in this arduous task of repositioning,” Victor Oluwalade, a Chartered Accountant and financial pundit told Newsclick Nigeria.
Also speaking, a Financial Analyst and experienced Banker with AriseTV, Mr. Chika Mbonu on Friday morning during the station’s (monitored by NewsClick Nigeria) business breakfast programme GBR, said the industry regulators opted for a bridge Bank solution when the defunct Skye Bank was distressed instead of the easier but disastrous route of just liquidating the Bank.
“When a bank is in distress, the NDIC, AMCON and CBN have about three or four solutions to resolving the distress situation in the Bank. The extreme, is basically to liquidate the Bank, but if you do that what happens is that the depositors lose their funds. To avoid that ugly situation was why the CBN came up with the bridge Bank solution. This made Polaris Bank a bridge Bank from the former Skye Bank which was then, a Systemically Important Bank (SIB).
“The CBN poured in about N1.3trn and people were wondering if the intervention by the CBN will end like previous bridge Banks ended with no Return on Investment (ROI) for the Federal Government. You will recall also that there was some sort of protests within the system when it became public knowledge that the Bank was sold for some paltry amount. But we are happy that the CBN has come out now to announce the winners; Strategic Capital Investment Limited, that won the bid with upfront consideration of N50 billion to acquire 100% of the equity of Polaris Bank and also accepted the terms of the agreement which include the full repayment of the sum of N1.305 trillion, being the capital bonds injected. This is a better deal than some other project Banks that the CBN, NDIC and AMCON have handled in the past. So this is a very good deal.”
The Analyst commended the Polaris Bank management for a job well done considering the feats achieved while the Bank transitioned.
“But most importantly, like in our part of the world, if you don’t train your daughter well, she won’t get good suitors. So, when you get good suitors, you must also commend the parents. So those who were assigned with responsibility of looking after the Bank over this period, deserve commendation because we know what some other people who were transition management in other bridge Banks did to those Banks. They literally slaughtered the Banks and nothing was left but in the case of Polaris Bank, the transition management turned around the Bank, stabilized it, returned it to profitability and even moved it to the digital Bank value chain. We hope that the new investors will come in and take the Bank to the next level,” Mr. Mbonu said.
