The seamless change of ownership supervised by the Central Bank of Nigeria, Asset Management Corporation of Nigeria and the Nigerian Deposit Insurance Corporation; the renewed confidence of staff and customers, as well as the decision of the new management to hit the ground running last week, will be some of the low-hanging fruits that the new owners of Polaris Bank Limited will rely upon to attain sustainable growth, writes Festus Akanbi
For the new management of Polaris Bank Limited, time waits for no one. This is because, following the recent purchase of the bank by Strategic Capital Investment Limited (SCIL), its new management last week began a coordinated move to lead the institution into the path of sustainable growth.
This is because THISDAY’s random checks in some of the bank’s branches in Lagos last week showed that staff and customers of the bank were going about their normal activities in a manner devoid of apprehension from staff, cash run, or any other forms of disruption which usually affected Nigerian banks during ownership changes.
New Investors
Two weeks ago, the Central Bank of Nigeria (CBN) unveiled SCIL as the new owner of the bank after a vigorous bidding process.
A statement by the apex bank’s Director of Communications, Mr. Osita Nwanisobi, explained that the new owner, SCIL, completed a Share Purchase Agreement (SPA) for the acquisition of 100% of the equity in Polaris Bank, paid N50 billion and has agreed to refund N1.3 trillion injected into the bank.
“As part of the CBN intervention, consideration bonds with a face value of N898 billion (future value of N1.305 trillion) were injected into the bridge bank through AMCON, to be repaid over 25 years. These actions were taken to prevent the imminent collapse of the bank, enable its stabilisation and recovery, protect depositors’ funds, prevent job losses and preserve systemic financial stability,” the statement said.
“SCIL has paid an upfront consideration of N50 billion to acquire 100% of the equity of Polaris Bank and has accepted the terms of the agreement which include the full repayment of the sum of N1.305 trillion, being the consideration bonds injected.
“The CBN thus received an immediate return for the value it has created in Polaris Bank during the stabilisation period, as well as ensuring that all funds originally provided to support the intervention are recovered.”
He said the sale was coordinated by a divestment committee comprising the CBN and AMCON representatives and advised by legal and financial consultants.
“In the process, parties who had formally expressed interest in acquiring Polaris 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 parties eventually submitted final purchase proposals following technical evaluation,” Nwasinobi said.
No Encumbrance
With the constitution of a new board largely made up of the existing and the infusion of new directors, analysts said the coast is clear for Polaris Bank to compete on equal footing with other commercial banks in the country.
Perhaps, one of the jokers by the new owners was the appointment of Mr. Adekunle Sonola, an experienced banker as the managing director/chief executive of the bank.
Analysts said Sonola came highly recommended with more than 33 years of experience in the African financial services sector, most recently as executive director of commercial banking at Union Bank Plc, before which he was the pioneer regional managing director of Guaranty Trust Bank East Africa and the director of investment banking at Standard Bank in South Africa.
Sonola has also served on the boards of First Bank of Nigeria Plc where he chaired the board’s risk management committee and Airtel Nigeria Plc.
Pact with Staff
And in line with the determination of the new owners to reposition the bank without delay, Sonola who resumed duty last Monday did not mince words when he conveyed his first meetings with the staff of the bank in various locations in Lagos.
THISDAY gathered that the meetings took place at the bank’s head office on Akin Adesola, Victoria Island area of Lagos and at its headquarters annexe offices in Adeola Hopewell, Churchgate and Alausa areas of Lagos, between Monday and Tuesday, where members of staff had the opportunity to meet with the new helmsman and his team for the first time. They also got the chance to offer suggestions on how to achieve the goals set by the current management of the bank.
A source disclosed that the new management has also reached out to key customers and contractors of the bank on the readiness of the new management to add value to the bank’s operations and performance.
The source, who dismissed any fear of job rationalisation by the new owners of the bank, said the new management has promised to recruit more capable hands to join the existing workforce to make Polaris competitive in the emerging banking landscape in Nigeria.
Free from Multiple Supervision
Analysts think that the sale of the bank to SCIL will free Polaris from the burden of multiple supervision which used to be a problem before the latest arrangement. This is because, as a bridge bank, the former board and management of the bank were under the watchful eyes of the CBN, AMCON and NDIC, the three institutions which use to intervene from time to time.
However, now that it has been taken over by a private firm, industry analysts said the coast is clear to take decisions with the spontaneity demanded by modern banking practice.
Setting the agenda for the bank, the new chief executive promised to take the bank to the next phase of sustainable growth. Speaking on behalf of SCIL, the new core investor, Sonola said, “We are excited to participate in the next phase of growth for Polaris Bank and to have been able to recruit such an experienced and diverse board of directors we are confident can lead Polaris Bank into a new era of sustainable growth. This is an exciting time for the Nigerian financial services industry and we are committed to building on the strong foundations that have been established by the departing board. We would like to express our thanks for their service and wish them well.
Analysts believed that another decision that is going to work in favour of the new owners was the retention of the chairman of the bank, M K Ahmad.
Watchers of the unfolding development said it makes sense to retain Ahmad who had supervised the revamping of the bank since 2018 after the transition from Skye Bank Plc to Polaris Bank.
Speaking on the change of ownership, Ahmad said: “I am personally proud to have been asked to lead the bank into an exciting new future and I look forward to working with the new board and our core investors to build on the platform we have created. We have mandated the incoming management to develop an innovative, but sustainable growth strategy that prioritises the needs and aspirations of our current customers.”
Other board members include Abubakar Danlami Suleiman, non-executive director, Salma Mohammed, non-executive director, Adeleke Alex Adedipe, non-executive director, Ahmed Almustapha, non-executive director, Francesco Cuzzocrea, non-executive director, Olabisi Olubunmi Odunowo, non-executive director, Abdullahi S Mohammed, executive director, and Segun Opeke, executive director.
Kudos to CBN
Commendations have been pouring in for the CBN for the successful handling of the sale of Polaris Bank even as watchers of the development believe that the clean bill of health given by the National Assembly on the transaction is going to be another boost to the operation of the new board and management of the bank.
According to the chairperson of the House of Representatives, Ad Hoc Committee was set up to investigate the sale of the bank, Hon. Henry Nwawuba, there was evidence of substantial compliance with the process.
He said that out of the 35 companies invited to bid for the bank, the regulatory agency shortlisted the bidders to 15 and later seven and afterwards got presidential approval to proceed with the sale of the bank.
Good Omen for Nigerian Banking Industry
One of the industry analysts who commended the management of the bank for leading a successful transition while urging the core investors (SCIL) to take the financial institution to the next level was an ARISE TV analyst, Chika Mbonu.
