Polaris Bank Limited is facing a challenging situation as reports suggest that the bank is currently embroiled in a controversy over its recent sale by the Central Bank of Nigeria. Speculations are rife that the sale of Polaris Bank may be reversed by the incoming administration of Bola Tinubu on May 29, 2023, following reports making the rounds.
In October 2022, the Central Bank of Nigeria made headlines when it sold a bank for a reported N40 billion. This move was met with controversy, as the bank had previously invested over N1.2 trillion into it. The recent sale has sparked a flurry of accusations from various quarters, including lawmakers, trade unions, and other detractors, who have labelled the transaction as a dubious move.
Reports indicate that the apex bank has sold the bank to Strategic Capital Investment Limited (SCIL), which is purportedly managed by Auwal Lawan Abdullahi. Abdullahi, who holds the Sarkin Sudan Gombe traditional title from the north-eastern state, is reportedly the son-in-law of Ibrahim Babangida.
Despite his limited credentials in banking and finance, Abdullahi has been entrusted with the management of the bank.
According to sources, the recent sale of Polaris Bank resulted in Nigerian taxpayers incurring a loss of approximately 97% of their initial state investment. According to company filings, as of December 2020, the Asset Management Corporation of Nigeria (AMCON) had invested a total of N848 billion in the bank. Insiders have reported that an additional N350 billion was injected into the bank between January 2021 and July 2022.
Reports have emerged that amidst the ongoing crisis, certain customers of the bank, particularly small and medium enterprises, are choosing to withdraw their funds and transfer them to more secure financial institutions due to concerns of potential financial instability.
Reports from anonymous sources within the bank reveal that a number of customers have recently withdrawn their deposits due to concerns over the institution’s ethical practises and significant job cuts. These developments have eroded trust in the bank and left some customers feeling uneasy about the safety of their funds.
According to sources, it has been revealed that more than 100 branch managers of the bank have been suspended without pay for the second consecutive month due to their non-performing loan ratio exceeding 5%.
According to sources, the loans in question were approved in accordance with proper procedures and the bank earned interest on them.
According to several managers who spoke with our correspondent, they claim that they were not responsible for booking the majority of the loans in question. Instead, they allege that the loans were referred and booked by higher-ranking staff members who are currently free to move about without consequence.
In violation of labour laws, the bank has issued letters of suspension for a duration of 30 days, exceeding the legally permissible period of two weeks without pay for the affected worker.
Following the expiration of the initial suspension period, the affected staff members were left without pay for an additional two months without any further communication from management. According to some employees who spoke to reporters, the bank’s management has allegedly mandated that suspended staff members report to work every day and undergo daily performance evaluations, with the managing director overseeing weekly meetings that reportedly last well into the night.
Reports indicate that a group of disgruntled bank employees have taken legal action against their employer, filing a lawsuit in both the National Industrial Court in Lagos and Abuja. Several disgruntled employees have announced plans for a large-scale demonstration against the bank scheduled for next Tuesday. Reports indicate that the planned protest is set to take place across the entire nation. Following the apparent signs of distress in the bank, a considerable number of individuals and SMEs have reportedly opted to close their accounts with the institution and transfer their deposits to more secure banks.
Efforts to reach Polaris Bank management for their reaction to the development proved futile.
