CBN bids sale of Polaris Bank after rescuing it with N1.2 trillion

The Central Bank of Nigeria is allegedly bidding to secretly sell Polaris Bank Ltd to a business man, Auwal Gombe for N40 billion.

According to sources, the transaction has a potential of amounting to a paltry three percent of up to N1.2 trillion taxpayers’ funds poured into the lending house since its 2018 nationalisation. 

CBN Governor, Godwin Emefiele has already received a presidential approval to advance the sale, with public disclosure due any time soon unless backdoor objections grow stronger.

Meanwhile, crisis still lingers over the CBN’s decision to sell the bank to Auwal Lawan Abdullahi who is a son-in-law to former Nigerian military head of state, Ibrahim Babangida who holds the Sarkin Sudan Gombe traditional title from the north-eastern state, despite his limited credentials in banking and finance.

Lawan Abdullahi, described as a commercial farmer in Gombe flaunts a scanty public profile as opposed to his flamboyant 2017 marriage to IBB’s second daughter and last child, Halimat.

Relatively, sources have alleged that the CBN governor, Godwin Emefiele and others scheming to hurriedly close the deal for N40 billion could squeeze more for Nigerians by publicly listing the bank for sale rather than the prevailing opaque moves that would most likely benefit only those midwifing the backroom negotiations.

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According to a source, Bad bank buyer, AMCON has legal obligations to list the bank for sale publicly, but its directors have limited its involvement in the talks while the corporation’s MD, Ahmed Kuru, may be tagging along with the CBN.

Another AMCON top chief who spoke under anonymity to avoid being victimised for speaking to journalists without institutional approval said they had been “basically handicapped” by the governor.

“We saw that the governor has deep interest in the sale and everyone fell in line.”

Formerly Sky Bank, Polaris was nationalised in September 2018 after AMCON bought its debts but has not been able to sell the bank to investors since the takeover, which was precipitated at the time by the financial crisis, recession, of 2016 and 2017.

Four years on, with the Buharis’ administration at the verge of passing out and Mr Emefiele more likely than not to go with it, People familiar with the matter said desperation to sell Polaris was writ large in recent weeks while President Muhammadu Buhari reportedly takes sides with the CBN leadership and other wheeler-dealers involved.

“Emefiele and others convinced the president to grant approval for the sale and they’re now moving to crush anyone standing in the way,”

“They don’t seem to care that they could do more than sell the bank for more than the roughly N40 billion offer they currently have from their secret talks.”

“The sale could see Nigerian taxpayers lose around 97 percent of state investment in Polaris. As of December 2020, AMCON investment in the bank stood at N848 billion, per company filings, while an additional N350 billion was poured in between January 2021 and July 2022.”

“The loss is too much! They should have allowed the bank to fail, but they plunged more Nigerians into poverty by investing public funds into a bottomless pit.”

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However, a spokesman for Polaris directed all enquiries to CBN, saying the bank’s management had nothing to do with the sale but spokesman for CBN did not respond to multiple attempts to obtain comments on the matter.

Edward Adamu, head of AMCON who also serves as one of Mr Emefiele’s deputy governors at CBN, also did not return requests seeking comments about the deal.

Polaris is the latest AMCON adventure that may prove loss-making since its involvement in three other failed banks in the 2010s — Mainstreet Bank, Keystone Bank and Enterprise Bank.

“The federal asset management agency was established in 2010 to absorb bad bank loans following the 2008 global financial crisis but AMCON’s performance should not be gauged solely on how much it spends saving a commercial investment.” Economist Edward Omosewe said.

“Generally speaking, government interventions like AMCON are put in place to save jobs and businesses,” He added.

“While it might seem easy to say a large amount was injected into a business to save it, it would be difficult to quantify the overall economic benefits of jobs saved, direct or indirect, as well as other businesses standing because of the bad loans purchased by AMCON.”

Mr Omosewe also said AMCON would be more successful if allowed to operate under a transparent environment.

“Transparency and accountability will substantially eliminate insinuations about corruption.”

Is something fishy going on?