By Michael Adeoye
June 21, 2024 Rumors and misinformation can destabilize even the strongest financial institutions, as evidenced by historic cases in the United Kingdom, United States, and Germany. Now, similar unfounded rumors are threatening Nigeria’s financial sector, specifically targeting Polaris Bank and other institutions. These dangerous falsehoods must be immediately dismissed to safeguard the stability of our banking system.
Following the unfortunate withdrawal of Heritage Bank’s banking license, peddlers of fake news seized upon an old Central Bank of Nigeria (CBN) directive from January 10, 2024, which mandated changes in the boards of Union Bank, Keystone Bank, and Polaris Bank. These rumormongers twisted the directive to suggest that the operating licenses of these banks were at risk of revocation, urging Nigerians to withdraw their funds hastily.
The CBN swiftly debunked these rumors. Acting Director of Corporate Communications, Mrs. Hakama Sidi Ali, reaffirmed that there are no plans to revoke any bank licenses and urged the public to disregard the baseless claims. She clarified that the circulated directive was being misrepresented by individuals with malicious intent to create panic within the financial system.
Mrs. Ali emphasized that the withdrawal of Heritage Bank’s license was an isolated case and that the rumors about further revocations were mere fabrications. The CBN reassured the public of the safety of their deposits and stressed the resilience of the banking system, encouraging Nigerians to continue their regular banking activities without concern.
The potential impact of such rumors is significant. A systemic failure in Nigeria’s banking sector could lead to a catastrophic economic fallout, characterized by weak growth, low purchasing power, and spiraling inflation. The loss could amount to over N9 trillion in assets and more than N7 trillion in customer deposits, causing a seismic shift in the financial landscape.
Among the banks targeted by these false claims is Polaris Bank, which has shown remarkable resilience despite macroeconomic challenges. At the latest audit, Polaris Bank significantly increased its deposit mobilization from N1.14 trillion to N1.76 trillion, a 54 percent improvement. The bank’s gross earnings also rose from N121 billion to N197 billion, a 62 percent increase, demonstrating sustained profitability since its emergence in 2018.
Polaris Bank has also made substantial contributions to economic growth, particularly in supporting micro, small, and medium enterprises (MSMEs). The bank’s loan book grew by 138 percent, from N261 billion in 2019 to N622 billion in 2023. Recognized as the ‘MSME Bank of the Year’ consecutively in 2021 and 2022, Polaris Bank launched a N1 billion fund in partnership with Lagos State Employment Trust Fund (LSETF) to empower entrepreneurs.
Beyond financial performance, Polaris Bank has received accolades for its digital prowess and social responsibility. Awards from the Nigeria Fintech Award, Business Day Awards, and African Leadership Award highlight its innovative digital platform, VULTe. Additionally, the bank’s efforts in supporting education and empowerment projects, such as girl-child education initiatives and sustainable education interventions, underscore its commitment to societal progress.
Moving Forward: Combating Misinformation and Building Trust
It is foolhardy to base one’s dealings with Polaris Bank or any other institution on hearsay and misinformation. The CBN’s prompt response to dispel these rumors reaffirms the importance of transparency and vigilance in safeguarding the integrity of the financial system. Baseless speculations can incite panic and trigger catastrophic runs on otherwise stable institutions, as seen in global financial crises.
Amidst these challenges, Polaris Bank stands as a beacon of resilience and commitment to societal progress. Its robust financial performance, reliable digital technology, and impactful community initiatives exemplify the bank’s dedication to stability and growth. Collective efforts to combat misinformation and uphold trust are imperative to ensure the stability and prosperity of Nigeria’s financial landscape.