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
Banks in Nigeria closed 29.4 million accounts as of March 2025, according to the latest report by the Nigerian Interbank Settlement System (NIBSS).
The figure represents a sharp year-on-year increase of 30.43 per cent from the 22.54 million closed accounts recorded in March 2024.
It also reflects a steady rise in account closures over recent months, with 33.29 million closed accounts reported in February 2025 and 29.43 million in January.
The report also revealed a significant increase in dormant accounts, which surged to 33.39 million in March 2025, up from 19.79 million in the same period in 2024, a 71.3 per cent rise in inactive accounts over the past year.
Despite the spike in closures and dormant accounts, the number of active bank accounts rose from 219.64 million in March 2024 to 320.05 million in March 2025, representing an increase of over 100 million, or 45.7 per cent.
NIBSS defines a dormant account as one that has seen no deposit, withdrawal, transfer, or point-of-sale transaction for a period of six months.
The surge in account closures and dormancy follows the Central Bank of Nigeria’s directive issued in December 2023, mandating commercial banks to restrict Tier-1 accounts not linked to a Bank Verification Number (BVN) and National Identification Number (NIN) by March 1, 2024.
In response to the directive, BVN enrolment increased from 61.6 million in April 2024 to 66.23 million by July 2025, as more Nigerians rushed to meet the CBN’s compliance deadline.
The Joint Committee of the House of Representatives on Public Accounts and Public Assets has threatened to issue a warrant of arrest against Mr. Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), over repeated failure to honour its invitations regarding the probe into non-compliance with the Fiscal Responsibility Act 2007 and Finance Act 2020.
Olayemi Cardoso,, Gov, CBN
In a joint statement released on Friday and signed by Hon. Bamidele Salam and Hon. Ademorin Kuye, chairmen of the committees, the lawmakers decried the CBN governor’s continued disregard for legislative summons.
The committee is investigating the non-remittance of operating surplus as well as the mismanagement of unclaimed dividends and dormant account balances.
According to the committee, the Office of the Auditor General for the Federation reported a liability of N5.2 trillion in unremitted operating surplus due to the federal government from 2016 to 2022; a claim corroborated by the Fiscal Responsibility Commission in a separate submission to the National Assembly.
The committee cited provisions of the Finance Act 2020, which mandate that unclaimed dividends from publicly listed companies and dormant bank account balances older than six years be transferred into the Unclaimed Fund Trust Fund. The fund is to be managed by a Governing Council led by the Minister of Finance and the Debt Management Office (DMO).
Contrary to this, the CBN maintains that the Financial Institutions Act 2020 empowers it to manage dormant balances.
However, the committee noted that the Attorney General of the Federation has issued a legal opinion affirming that the Finance Act 2020 remains the valid law guiding the management of such funds.
Following extensive submissions, the committee resolved that the CBN must remit N3.64 trillion, representing 70% of the undisputed N5.2 trillion operating surplus, within 14 days from receipt of its June 27, 2025, directive, pending final reconciliation of the disputed amount.
Additionally, the apex bank was directed to submit a detailed report on the total sum of unclaimed dividends and dormant account balances by June 30, 2025.
The CBN was also ordered to transfer these funds into the Unclaimed Fund Trust Fund within 14 days and furnish the House with evidence of the transaction.
The lawmakers expressed frustration that, despite the clear directives and ample time, the CBN governor has failed to respond or appear before the joint committee to provide an explanation.
“In view of this continued defiance, the Committee will be compelled to exercise its constitutional powers to compel Mr. Olayemi Cardoso to appear before it,” the statement warned.
Moody’s has upgraded the outlook on Ecobank Transnational Incorporated’s long-term issuer and senior unsecured debt ratings to stable from negative.
In the latest rating commentary, made available to media on Thursday, Moody’s also affirmed the pan-African banking group’s B3/Not Prime long- and short-term issuer ratings; B3 senior unsecured debt rating; b2 notional Baseline Credit Assessment and b1 Adjusted BCA.
ETI’s subsidiaries operate across 38 countries, including 35 African countries, and total assets of $28.9bn as of March 2025, details from the rating note highlighted. Moody’s said the decision to change the outlook to stable on the long-term issuer and senior unsecured ratings reflects ETI’s resilient financial performance.
The rating upgrade also takes into consideration higher dividends being upstreamed to ETI, resulting in lower double leverage and reduced refinancing risk.
The rating adjustment also reflects an expectation that the recapitalisation process of Ecobank Nigeria Limited will be completed by the end of 2025, with limited impact on the group’s financial fundamentals.
“The stable outlook also captures our expectation that a series of capital-boosting initiatives and actions to cure Ecobank Nigeria’s total capital position will be completed before the end of 2025”, according to the ratings agency.
In May 2025, ETI received shareholder approval to raise $250 million in Additional Tier 1 (AT1) capital and announced the launch of the transaction effective 9 July 2025, of which a portion is expected to be downstreamed to Ecobank Nigeria as AT1 capital during Q3 2025.
Ecobank Nigeria’s plan to raise $200m in AT1 capital was noted in the rating note. The ratings analysts said they consider
“We also note that Ecobank Nigeria’s recent successful offer to tender $150m of its February 2026 $300 million notes and consent to remove the capital adequacy ratio covenant from this bond’s terms alleviates risks of an event of default in Nigeria that would trigger cross default at the ETI level. Over the past year, ETI has shown resilience in its financial performance, which supports our change in outlook to stable. Liquidity risks are being moderated by the group’s gradually improving profitability during 2024 and Q1-2025.
“This has translated into a 22 per cent increase in dividends upstreamed to ETI during 2024, these being received from 22 dividend-paying subsidiaries compared to just 14 in 2021,” the rating commentary revealed.
In turn, albeit high, ETI’s double leverage ratio, which measures the liquidity risk taken on by the holding company, as a result of it borrowing in order to invest in the equity of its subsidiaries, has eased to 168 per cent as of December 2024 from 173 per cent in 2023.
Additionally, the stable outlook reflects reduced liquidity risk at the holding company level with the refinancing of short-term liabilities in 2024 with longer-term funding.
Moody’s said this is underpinned by demonstrated market access, notably through senior unsecured notes issuance of $400m in October 2024 and a tap increase of $125m in May 2025, maturing in October 2029.
ETI’s B3 long-term issuer ratings affirmation reflects the affirmation of the group’s b2 notional BCA; the affirmation of the group’s b1 adjusted BCA as captured by a one-notch uplift for affiliate support, reflecting Moody’s assessment of a moderate probability that the firm’s major institutional shareholders would extend support to the group. Moody’s said asset quality for the group has improved over recent years.
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