How Tokunbo Abiru is gradually steadying the ship at Polaris Bank

Eleven months after the Central Bank of Nigeria (CBN), and the Assets Management Corporation of Nigeria (AMCON) took over Skye Bank, renaming it Polaris Bank, which saw the emergence of Tokunbo Abiru as its managing director, the bank now appears to be relatively stable, and gradually gaining customer confidence.

On Friday 21 September 2018, news of the sudden take-over of Skye Bank and its replacement with a bridge bank, Polaris Bank Limited, not only jolted the banking community but even investors as a result of precedence going by the losses that customers, staff and shareholders of defunct Savannah Bank and Societe Generale Bank of Nigeria sustained.

According to Godwin Emefiele, the CBN governor, the defunct Skye Bank was the only bank that recorded a loss in 2015 as some of the challenges rocking it included; insider trading, non-performing loans, and non-compliance with the remission of government’s funds to the Treasury Single Account (TSA), which attracted a fine from the CBN, and a host of other infractions.

“The capitalisation of Polaris Bank Limited is being done by the AMCON through the injection of about N786 billion to return the bank to soundness and profitability so as to enable its subsequent sale to credible and financially sound third-party acquirers,” Emefiele said following the takeover.

On assumption of office in 2018, Tokunbo Abiru drew up a holistic and integrated approach to business innovation, which elevated the bank to deliver a superior customer-centric experience. The impact of this change has been reflecting confidently on the bank’s report card, which restored customers’ trust and confidence in the system.

“What we see in the future is a bank that in the next three to five years is one of the first five banks in Nigeria; a fully-fledged retail bank with strong digital backing. So our stakeholders will get more of enhanced values which are clearly different from the bank of the past,” Tokunbo Abiru said, while addressing 61 graduate trainees of Polaris Business School, held at Polaris Bank Training School, Ibadan.

Since becoming CEO, the Abiru-led Polaris team has continued to implement the July 2016 regulatory intervention to include entrenching sound corporate governance and risk management practices and transforming Polaris into a fully-fledged retail and commercial bank with strong digital backing.

Through his recovery initiatives, the bank has been able to recover over N200 billion of outstanding bad loans within a short period. At the same time, reaching settlement and restructuring agreements with many of the chronic bad debtors, and this has resulted in substantially improved payments and prospects of future recoveries.

In line with the bank’s broad mandate, which includes cost management and optimization, as well as divestments, to improve the institution’s financial position, Tokunbo Abiru has embarked on several initiatives aimed at restructuring and repositioning the bank.

Some other initiatives embarked upon by Abiru include, branch rationalisation, review of service contracts and cash management operations which have resulted in huge financial savings. Also, the bank has successfully settled many matured trade and bilateral obligations and restructured outstanding balances with the relevant institutions and counterparties.

Under Abiru’s watch, the bank has divested from four local subsidiaries releasing total cash value of N6.2 billion.

Polaris Bank under Abiru has also continued to promote the CBN’s National Financial Inclusion Strategy aimed at reducing the number of eligible adult Nigerians that are excluded from the formal financial system from 46.3 per cent to 20 per cent by the year 2020. The lender has been remarkable, strutting the length and breadth of Nigeria to promote financial inclusion.

Polaris Bank has also made available different credit and funding options to small-scale entrepreneurs and business owners, operating in the informal sector, in order to bring them into mainstream financial system.

The bank has also employed interactive financial literacy sessions as a platform to empower students with money management skills in schools across the country. So far, the bank has organized interactive sessions on financial literacy in schools across seven states namely; Cross River, Akwa Ibom, Ebonyi, Zamfara, Oyo, Bauchi and Benue.

Not resting on his oars, the seasoned banker has said that he would love to leave with a sense of satisfaction that he delivered on the mandate of the CBN by taking Polaris to the top.

Regulators have expressed hope, that AMCON would be able to sell Polaris Bank to new equity investors before 2023, its sunset year; otherwise, its ownership will be transferred to CBN and Federal Ministry of Finance – both owners of AMCON.

While the mandate may appear daunting for Polaris Bank, to ensure its sound footing,  AMCON immediately recapitalised it with N786 billion. By this action Polaris Bank became a nationalised, government-owned entity, as opposed to publicly quoted status of its predecessor whose equities were listed on the Nigerian Stock Exchange (NSE).

To assume this role effectively and achieve the set objectives, Polaris Bank Limited was also incorporated as a legal entity authorised to offer banking and financial services with its registration number on CAC Register as RC 1525101.

While the financial services sector and indeed the nation await the next level for Polaris Bank, the precedent set by the management and staff of the bank in winning depositors’ confidence speedily will go down in modern day history of the banking sector in Nigeria as an exemplary worth studying.