October 5, 2018 / 4:34 PM / a year ago

UPDATE 1-Nigeria to prosecute those to blame for Skye Bank's failure -finance minister

(Adds details, quotes, background)

ABUJA, Oct 5 (Reuters) - Nigeria’s government will prosecute those responsible for the collapse of failed lender Skye Bank, weeks after the central bank withdrew Skye’s operating license, the country’s finance minister said on Friday.

Nigeria’s central bank revoked Skye Bank’s operating licence on Sept 21 and a bridge bank called Polaris was created to take over the lender’s assets. It said state-run bad bank the Asset Management Corporation of Nigeria (AMCON) owned 100 percent of Polaris and the lender would be sold to investors.

“All those found culpable in the failure of the bank would be prosecuted,” the finance ministry said in an emailed statement.

“We have to show some examples, we cannot just be bailing out banks and leaving perpetrators of the failure of these banks to just go scot-free,” Finance Minister Zainab Ahmed was quoted as saying in Friday’s statement. She took over as finance minister after Kemi Adeosun resigned in September.

The central bank shored up Skye Bank, a mid-tier lender, in 2016 with a 100 billion naira ($327 million) capital injection after sacking its top management for failing to meet minimum capital requirements. It then appointed a new management team.

Skye’s problems started after it used short-term funds to buy local lender Mainstreet Bank in 2014 but failed to raise fresh cash. It had been in talks with shareholders and investors to raise capital but suspended plans after weak oil prices hit the capital markets and drove foreign investors away. ($1 = 305.4000 naira) (Reporting by Camillus Eboh Writing by Chijioke Ohuocha and Alexis Akwagyiram Editing by Louise Heavens)

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