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Polaris Bank Reportedly Loses N26Bn Loans to 6 Ex-Directors without Collaterals

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Polaris Bank has lost N26.005 billion worth of loans granted to 6 ex-directors, mostly without collaterals.

Polaris Bank Reportedly Loses N26Bn Loans to 6 Ex-Directors without Collaterals

Economy Post found from the bank’s 2022 annual report that 5 out of the six ex-directors did not perfect their collaterals before receiving the loans from the bank.

Only one ex-director, Jason Fadeyi of Newcross Exploration and Production, who collected N25.442 billion term loan from the bank, perfected his collaterals.

However, the term loan given to him was recorded as “lost,” meaning that it was not recovered by the bank.

From the Corporate Affairs Commission (CAC) records, Newcross Exploration and Production was registered on July 9, 2013, with Festus Fadeyi and Bolaji Ogundare as persons with significant control of the company.

Fadeyi borrowed another N30.922 billion term loan from the bank – which has been placed on the watchlist.

Placing a loan on a watch list means that “a list (a subset) from a universe of securities, loans or other financial instruments is identified for more intense monitoring,” according to the Open Risk Manual.

Based on Polaris Bank’s records, Ibiyi Ekong of Demanta Nigeria Limited is another ex-director who took loans from the bank without repaying them.

Ekong, a former executive director of the bank who resigned in 2016, owes the bank N89 million.

The bank recorded it as loss, with her collaterals not perfected.

Collateral perfection allows a legal claim to seize assets of a payor defaults, according to Investopedia, an online investment dictionary.

She now works at the Foundation for Partnership Initiatives in the Niger Delta.

Ekong also owes the bank N4 million borrowed as a mortgage loan and another N4 million taken as an auto loan, which was not repaid.

Bank records showed their collateral perfection statuses were described as “not applicable.”

Next is Timothy A. Oguntayo, who took N100 million mortgage loan but did not pay it back, prompting the bank to report it as loss.

The bank said that his collateral perfection status was “not applicable.” When someone’s collateral perfection status reads “not applicable,” it means the person is not mandated to present collateral for a loan, experts said.

Oguntayo is a former managing director of Skye Bank (now Polaris Bank), who was earlier charged by the Economic and Financial Crimes Commission (EFCC) but later exonerated.

Oguntayo also owes Polaris Bank a mortgage loan of N100 million, which was also recorded as “lost.” It means he did not pay back both loans.

Abimbola Izu, another ex-director, got N103 million mortgage loan from Polaris Bank but did not repay it, according to bank records.

Her collateral perfection status was also recorded as “not applicable.”

Bank records also showed that Izu took a term loan of N17 million with another “not applicable” collateral status.

Izu is a lawyer and principal advisor at Portalls Advisory Services.

Theodora Amaka Onwughalu is another ex-director who borrowed N19 million mortgage loan from Polaris Bank but did not pay it back. Her loan was recorded as “lost,” with collateral perfection status classified as “not applicable.”

Onwughalu is the chief executive officer of Blueshield Financial Services Limited and was the former group managing director of Mainstreet Bank Limited.

Similarly, Dotun Adeniyi, an ex-director of Polaris Bank, borrowed N27 million mortgage loan from the financial institution but did not repay it.

The loan was recorded as “lost.” The collateral perfection status was also described as “not applicable.” Adeniyi resigned from the former Skye Bank ( now Polaris Bank) board in 2016 during a shakeup, which saw all the board members resign their positions at the bank. According to bank records, the ex-directors took these loans while they were members of the board of the bank.

Tokunbo Abiru, now a Lagos senator, was appointed the managing director of the then Skye Bank in 2016 but resigned in 2020 to fulfil his political ambition. Adekunle Sonola is the current managing director of the bank.

As of December 31, 2022, total outstanding loans owed by these ex-directors of Polaris Bank, some of which would not be repaid, amounted to N 57.473 billion.

Management contributed to collapse of Skye Bank

In 2018, the Central Bank of Nigeria (CBN) revoked Skye Bank’s license and set up a bridge bank known as Polaris Bank. Skye Bank’s problems began when it used short-term funds to buy another bank, Mainstream Bank, in 2014, according to Reuters.

The Nigeria Deposit Insurance Corporation (NDIC) had accused the former management of the bank of being major contributors to the bank’s collapse, Reuters reported.

The CBN took over the bank in 2018 and injected N1.3 trillion to recapitalise and rehabilitate it.

As of 2018, the defunct Skye Bank Plc operated 300 branches across the country, employing over 500 staff members.

The bank was accused of poor corporate governance and inept management, which are evident in the loans taken without collateral and repayment.

Strategic Capital Investment Limited emerged as the preferred bidder for Polaris Bank in 2022, paying N50 billion.

It was given 25 years to repay the N1.3 trillion injected by the apex bank into the bank.

Experts call for strong corporate governance

Financial experts have urged other financial institutions to learn lessons from the defunct Skye Bank and strengthen their corporate governance structures.

“Some banks still have issues with corporate governance. It is obvious, from what you have said, that there was a total collapse of corporate governance at the defunct Skye Bank,” said an Abuja-based financial analyst, Uko Amadi.

“I guess the CBN was a bit late and did not act fast. However, banks should begin to examine themselves to ensure that things are done transparently. They are custodians of people’s money but should not act as if the deposits are theirs,” he noted.

An ex-bank worker, Chinyere Ogundamisi, said there was a need for regulators to pay a closer attention to activities of financial institutions.

“I am not for over-regulation because I think there is already over-regulation of the banking system. But I am saying that if you are regulating, get experienced people who know where loopholes should be to do the monitoring. Some persons at the CBN never worked in banks, and cannot detect some sharp practices. So, get people who worked in banks and allow them to do the monitoring.”

Bank keeps mute

Bolarinwa Rasheed, head of Corporate Communications, Polaris Bank, did not respond to questions regarding why the loans were lost even though the people were still alive.

He promised to get back to us but did not do so as at the time of going to press.

Credit: Economy Post


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E-Financial

9PSB Promotes Financial Literacy @ World’s Savings Day 2024

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9 Payment Service Bank (9PSB), a leading digital payment service provider committed to advancing financial inclusion in Nigeria, observed World Savings Day 2024 by conducting a financial literacy and mentorship programme for students at Fountain Heights Secondary School in Surulere, Lagos.

This initiative aligns with the Central Bank of Nigeria’s (CBN) directive for all financial institutions to implement financial literacy programmes aimed at students, youth, and the public. The goal is to instill a culture of financial discipline, savings, and prudent money management practices among Nigerians.

At the event, Tolani Jemi-Alade, Chief of Business Planning, Operations, and Resources at 9PSB, addressed the students, underscoring the importance of cultivating positive financial habits, particularly considering economic uncertainties. She stressed the need for young individuals to integrate into the formal financial system, stating,

“We encourage every young person with a regular income to open a bank account as an essential step towards financial independence and savings for future needs. Money is necessary for day-to-day transactions and to manage unforeseen circumstances. Early planning is crucial, as these needs are inevitable.”

Tolani further highlighted the significance of World Savings Day, as championed by CBN, which aims to raise awareness of financial literacy and promote a culture of saving, particularly among students and youth. She emphasized the importance of understanding and leveraging formal financial services for long-term financial security.

Oladimeji Saka, Lead for Retail Banking and Customer Acquisition at 9PSB, echoed these sentiments, noting that financial literacy should begin at an early age. He advised that parents play an instrumental role in guiding their children through transitional stages to adulthood, equipping them with the necessary financial knowledge to manage their finances responsibly.

In his remarks, the Vice Principal Academics, Mr. Romanus Emegwakor, who represented the Principal of Fountain Heights Secondary School, expressed his gratitude to 9PSB for their commitment to empowering students with financial knowledge.

“We are extremely appreciative of 9PSB for this invaluable financial literacy programme. It is crucial for our students to understand the significance of financial discipline, and we believe this initiative will help them develop the necessary skills to make informed financial decisions in the future,” he said.

World Savings Day is an annual global campaign dedicated to educating individuals, particularly the youth, on the importance of prudent financial planning and saving through formal banking systems.


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Kekere-Ekun, CJN Blames Reliance on Telecom Services for Online Banking Glitches

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Kudirat Kekere-Ekun, chief Justice of Nigeria and chairman of the Board of Governors, National Judicial Institute Justice has blamed telecommunications companies for the glitches experienced in the country’s banking sector.

Kekere-Ekun, CJN Blames Reliance on Telecom Services for Online Banking Glitches

Kudirat Kekere-Ekun, chief Justice of Nigeria

Kekere-Ekun said this in her keynote address at the 2024 National Workshop for Justice and Judges on Legal Issues in Telecommunications with the theme, ‘The Role of the Judiciary in Accelerating Digital Transformation in Nigeria.’

The blame on telcos comes in the wake of multiple glitches in online services. On August 14, 2024, customers reported that the Guaranty Trust Bank (GTBank) website was down, leading to speculation that it had been cloned and customer data intercepted.

The CJN said, “I will like to quickly bring our attention to two issues which I consider to be pivotal and which revolve around cyber security and the attendant challenges of exploring the digital space.

“The first is the increased risk of the personal data of consumers being misused or compromised by unscrupulous persons, thus necessitating the need for improved strategies and innovation for consumer protection in the telecommunications sector.

“Also, worth noting are deficiencies in the Banking Sector and which are attributable to reliance on digital services provided by the Telecommunications Sector. There is for instance the major challenge posed by electronically backed transactions which is commonplace in the Banking Sector.”

The CJN said these glitches have led to several issues including hacking of online banking platforms as well as banks being compromised.

“Concerns in this regard include the spate of customers whose online banking platforms have been hacked, as well as banks being compromised due to technological glitches not factored into their day-to-day operations. Consequently, these and several other challenges have resulted in a number of disputes which frequently require adjudication,” she said.

Kekere-Ekun said the deployment of technology in telecommunications plays a pivotal role in the advancement economic system of any country.

She, however, said there is a need to proffer solutions to legal issues arising from digital services provided by the telecommunications sector.

“It is also my expectation that the forum will equip Judicial Officers with the technical skills required for adjudicating disputes arising from the sector and keep them abreast with global standards and best practices,” she added.


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Ecobank Serves Customers Notice of Planned Service Disruption

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Ecobank Nigeria has alerted its customers to an upcoming brief service disruption due to scheduled system maintenance on its card services.

Ecobank Serves Customers Notice of Planned Service Disruption

The maintenance is set to occur from 11:00 p.m. on Thursday, November 7, 2024, until 1:00 a.m. on Friday, November 8, 2024.

In a notification to customers, the bank explained that during the maintenance window, cardholders might experience intermittent issues when using Ecobank cards on other banks’ channels.

However, the bank said all its specific channels, including ATMs and POS terminals, will remain operational.

Additionally, other digital platforms—such as the Ecobank Mobile App, USSD *326#, Ecobank Online, Omni Lite, and Omni Plus—will be fully accessible throughout the maintenance period.

The bank expressed apologies for any inconvenience, reaffirming its commitment to providing seamless banking experiences across Africa.

 

 

 

 

 

 

 


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