E-Financial
Polaris Bank Reportedly Loses N26Bn Loans to 6 Ex-Directors without Collaterals
Polaris Bank has lost N26.005 billion worth of loans granted to 6 ex-directors, mostly 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
The World Bank has approved a $500 million loan to Nigeria to support the country’s Community Action for Resilience and Economic Stimulus Programme.
According to information obtained from the bank’s website on Sunday, the approval, which took place on March 28, 2025, marks a significant step in addressing Nigeria’s economic challenges through expanded access to livelihood support, food security services, and grants for poor and vulnerable households and firms.
The project, officially titled the NIGERIA: Community Action (for) Resilience and Economic Stimulus Program, aims to provide essential support to households affected by economic downturns and to bolster community resilience.
It also seeks to improve food security and create economic opportunities for populations most affected by recent economic disruptions.
According to the World Bank, the program represents a significant step toward addressing systemic vulnerabilities in Nigeria’s economy.
By channeling resources directly to underserved communities, the project should alleviate the burden of rising living costs while fostering sustainable growth.
The $500 million loan is not the only financial commitment Nigeria anticipates this week as two additional funding packages are in the pipeline, awaiting final approval.
One of the loans is valued at $80 million and will focus on accelerating nutrition outcomes across the country.
The second, worth approximately $552 million, is designed to enhance access to quality basic education nationwide as both projects are scheduled for final clearance on March 31, 2025.
These loans are part of the World Bank’s broader strategy to support Nigeria’s development priorities, most especially in areas such as healthcare, education, and poverty alleviation, while the institution emphasized the importance of implementing these programs efficiently to ensure maximum impact.
While the loans aim to address urgent socio-economic needs, Nigeria’s rising debt profile has raised concerns among stakeholders. Under the President Bola Tinubu’s leadership, the country has received approvals for 11 World Bank projects totaling 7.45 billion in less than two years. However, data from the Debt Management Office (DMO) reveal that only 774.99 million (about 16% of the approved amount) had been disbursed as of July 31, 2024.
This slow pace of disbursement has sparked debates about the efficiency of project execution and fund utilization
Depositors of Heritage Bank (in-liquidation) with balances exceeding the insured sum of ₦5 million will be paid from the sale of physical assets and debt recovery efforts soon, the Nigeria Deposit Insurance Corporation (NDIC) announced on Sunday.
With substantial progress recorded in asset realization, the first tranche of liquidation dividends will be paid to uninsured depositors in April 2025 on a pro-rata basis, in line with Section 72 of the NDIC Act 2023, which prioritizes claims.
The clarification follows concerns raised by depositors regarding the status of their uninsured funds.
A statement issued by Hawwau Gambo, acting head of Communication & Public Affairs, NDIC, reiterated the Corporation’s commitment to ensuring timely payments.
Following the revocation of Heritage Bank’s banking license by the Central Bank of Nigeria (CBN) on June 3, 2024, the NDIC was appointed as the liquidator in accordance with Section 12(2) of the Banks and Other Financial Institutions Act (BOFIA) 2020 and Section 55(1 & 2) of the NDIC Act 2023.
In line with its statutory mandate, the Corporation immediately commenced the bank’s liquidation process, including the verification and payment of insured deposits.
Providing an update on the ₦5 million maximum payout per depositor, the NDIC noted significant progress while acknowledging some challenges affecting certain depositors, including issues related to Bank Verification Numbers (BVN), Post No Debit (PND) restrictions, and Know Your Customer (KYC) limitations.
“Significant progress has been made in reimbursing insured deposits up to the ₦5 million limit per depositor.
“However, depositors yet to receive payments are largely those without Bank Verification Numbers (BVN) or alternate accounts in other banks, which are required to process payments through the Nigeria Inter-Bank Settlement System (NIBSS). Others have Post No Debit (PND) restrictions on their accounts.
“Additionally, some accounts have KYC limitations, such as Tier 1 accounts that restrict maximum lodgment of funds, while others have name mismatches requiring resolution.
“Some depositors who have already been paid may also be unaware due to a lack of mobile transaction alerts on their alternate accounts where the NDIC deposited their insured funds.
“Therefore, depositors are advised to check their alternate bank accounts, as some payments may have been processed without their immediate awareness,” the statement read.
Regarding payments to uninsured depositors, the Corporation explained:
“While depositors with balances above ₦5 million have received their insured sums, the remaining amounts will be paid as liquidation dividends, in accordance with the Corporation’s statutory mandate.
“The NDIC has made substantial progress in selling the bank’s physical assets and recovering debts to ensure that depositors with balances above the insured limit receive their payments as soon as possible.
As a demonstration of this commitment, the Corporation began realizing physical assets and investments while aggressively recovering outstanding risk assets, alongside verifying and paying insured sums.
“To ensure transparency and compliance with legal requirements, the NDIC has widely advertised the asset disposal process on its official website, social media platforms, major national newspapers, and through radio and television announcements.”
The NDIC emphasized that its simultaneous approach of paying insured depositors while aggressively pursuing asset sales and debt recovery is designed to accelerate the liquidation process and ensure that all depositors receive their funds without unnecessary delays.
“With the significant progress recorded in asset realization, the Corporation will declare the first tranche of liquidation dividends in April 2025, to be paid to uninsured depositors on a pro-rata basis, in line with Section 72 of the NDIC Act 2023, which governs the priority of claims.”
For clarity, the referenced section states:
“Where an insured institution is unable to meet its obligations or suspends payment, or where its management and control have been taken over by the Central Bank of Nigeria following the revocation of its license, the assets of the insured institution shall be available to meet its deposit liabilities. Such deposit liabilities shall have priority over all other liabilities of the insured institution.”
Consequently, other claimants of the failed Heritage Bank, including creditors and shareholders, will only be considered for liquidation dividend payments after all depositors have been fully reimbursed, the NDIC added.
E-Financial
NDIC Fixes April as Time Uninsured Depositors of Heritage Bank will Receive Liquidation Dividends
Depositors of Heritage Bank (in-liquidation) with balances exceeding the insured sum of ₦5 million will be paid from the sale of physical assets and debt recovery efforts soon, the Nigeria Deposit Insurance Corporation (NDIC) announced on Sunday.
With substantial progress recorded in asset realization, the first tranche of liquidation dividends will be paid to uninsured depositors in April 2025 on a pro-rata basis, in line with Section 72 of the NDIC Act 2023, which prioritizes claims.
The clarification follows concerns raised by depositors regarding the status of their uninsured funds.
A statement issued by the NDIC’s Acting Head of Communication & Public Affairs, Hawwau Gambo, reiterated the Corporation’s commitment to ensuring timely payments.
Following the revocation of Heritage Bank’s banking license by the Central Bank of Nigeria (CBN) on June 3, 2024, the NDIC was appointed as the liquidator in accordance with Section 12(2) of the Banks and Other Financial Institutions Act (BOFIA) 2020 and Section 55(1 & 2) of the NDIC Act 2023.
In line with its statutory mandate, the Corporation immediately commenced the bank’s liquidation process, including the verification and payment of insured deposits.
Providing an update on the ₦5 million maximum payout per depositor, the NDIC noted significant progress while acknowledging some challenges affecting certain depositors, including issues related to Bank Verification Numbers (BVN), Post No Debit (PND) restrictions, and Know Your Customer (KYC) limitations.
“Significant progress has been made in reimbursing insured deposits up to the ₦5 million limit per depositor.
“However, depositors yet to receive payments are largely those without Bank Verification Numbers (BVN) or alternate accounts in other banks, which are required to process payments through the Nigeria Inter-Bank Settlement System (NIBSS). Others have Post No Debit (PND) restrictions on their accounts.
“Additionally, some accounts have KYC limitations, such as Tier 1 accounts that restrict maximum lodgment of funds, while others have name mismatches requiring resolution.
“Some depositors who have already been paid may also be unaware due to a lack of mobile transaction alerts on their alternate accounts where the NDIC deposited their insured funds.
“Therefore, depositors are advised to check their alternate bank accounts, as some payments may have been processed without their immediate awareness,” the statement read.
Regarding payments to uninsured depositors, the Corporation explained:
“While depositors with balances above ₦5 million have received their insured sums, the remaining amounts will be paid as liquidation dividends, in accordance with the Corporation’s statutory mandate.
“The NDIC has made substantial progress in selling the bank’s physical assets and recovering debts to ensure that depositors with balances above the insured limit receive their payments as soon as possible.
As a demonstration of this commitment, the Corporation began realizing physical assets and investments while aggressively recovering outstanding risk assets, alongside verifying and paying insured sums.
“To ensure transparency and compliance with legal requirements, the NDIC has widely advertised the asset disposal process on its official website, social media platforms, major national newspapers, and through radio and television announcements.”
The NDIC emphasized that its simultaneous approach of paying insured depositors while aggressively pursuing asset sales and debt recovery is designed to accelerate the liquidation process and ensure that all depositors receive their funds without unnecessary delays.
“With the significant progress recorded in asset realization, the Corporation will declare the first tranche of liquidation dividends in April 2025, to be paid to uninsured depositors on a pro-rata basis, in line with Section 72 of the NDIC Act 2023, which governs the priority of claims.”
For clarity, the referenced section states: “Where an insured institution is unable to meet its obligations or suspends payment, or where its management and control have been taken over by the Central Bank of Nigeria following the revocation of its license, the assets of the insured institution shall be available to meet its deposit liabilities. Such deposit liabilities shall have priority over all other liabilities of the insured institution.”
Consequently, other claimants of the failed Heritage Bank, including creditors and shareholders, will only be considered for liquidation dividend payments after all depositors have been fully reimbursed, the NDIC added.
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