The Nigeria Deposit Insurance Corporation (NDIC) has revealed that it safeguarded N949.6 billion depositors’ funds during the resolution of the failed Skye Bank Plc. The development was disclosed by the NDIC in the latest annual report covering 2018.

According to information obtained from the annual report, NDIC revealed that following the establishment of Polaris Bank Ltd, a total of N949.6 billion deposits from 5.4 million depositors were safeguarded with over 6,000 jobs in order to ensure the continuity of banking operations in 227 branches nationwide.

Failed Banks in 2018: In line with its mandate as the liquidator of failed insured institutions, the NDIC stated it ensured effective closure of the affected institutions and prompt reimbursement of the depositors in 2018.

According to the NDIC annual report, the liquidation activities of NDIC covered a total of 429 institutions, comprising 53 Deposit Money Banks (DMBs), 325 Micro-FInance Banks (MFBs) and 51 Primary Mortgage Banks (PMBs).

  • NDIC revealed that it adopted the bridge bank mechanism to resolve the distressed Skye Bankto protect depositors’ funds, employees and minimise disruption to the payment system.
  • The bridge bank (Polaris Bank Ltd) was subsequently acquired by Asset Management Corporation Of Nigeria (AMCON) pending its sale to credible and financially sound third-party acquirers.
  • Also, NDIC revealed it effectively closed 138 MFBs and 5 PMBs whose licenses were revoked by the Central Bank of Nigeria (CBN) between 8th October and 3rd December 2018.

Claims and Settlement: In the discharge of its obligation as Liquidator, the NDIC had disclosed it made cumulative payments amounting to ₦116.2 billion to depositors, creditors and shareholders as at 31st December 2018.

The breakdown includes payments of insured and uninsured deposits of ₦108.641 billion, ₦2.973 billion and ₦70.53 million to depositors of defunct DMBs, MFBs and PMBs, respectively. The NDIC also made payments of ₦1.27 billion to Creditors and ₦3.30 billion to Shareholders of banks in-liquidation.

  • In 2018, NDIC paid ₦4.83 million to 338 depositors of 18 closed DMBs.
  • As at 31st December 2018, the NDIC has paid a cumulative sum of ₦8.25 billion as the insured amount to 442,999 depositors of closed DMBs.
  • Also, in 2018, the NDIC paid ₦89.24 million insured deposits to 1,804 depositors of
    MFBs in-liquidation.
  • The cumulative payment of ₦2.97 billion was made to 83,415 depositors of closed MFBs as at 31st December 2018.

Payment of Dividend to Uninsured Depositors of DMBs in-liquidation during the year was estimated at ₦1.52 billion. The NDIC stated it paid the cumulative sum of ₦100.39 billion as a liquidation dividend to uninsured depositors of closed DMBs as at 31st December 2018.

Payments to Shareholders of Banks in-liquidation showed that the NDIC paid the sum of ₦593.78 million to 48 shareholders of Alpha Merchant Bank, Rims Merchant Bank and Continental Merchant Bank in 2018.

  • The cumulative liquidation dividend paid amounted to ₦3.30 billion to 679 shareholders
    of 6 DMBs in-liquidation as at 31st December 2018.
  • However, the total liquidation dividend declared for shareholders of DMBs-in-liquidation stood at ₦4.04 billion.