The management of Nigerian failed lender Skye Bank contributed to the collapse of the mid-tier bank, the country’s deposit insurance agency said on Monday.

The Nigeria Deposit Insurance Corporation (NDIC) said it was monitoring investigations of law enforcement agencies into Skye Bank with the central bank to determine the culpability of management in the bank failure.

The central bank in September revoked Skye’s operating licence and created a “bridge bank” called Polaris to take over the lender’s assets after the regulator shored up the bank in 2016 and sacked its management for undercapitalisation.

Polaris is up for sale by Nigeria’s “bad bank” AMCON which now owns the institution following the bailout.

In October, the government said it will prosecute those responsible for the collapse of Skye Bank in an attempt to set an example that the state will no longer bail out lenders while the culprits go unpunished.

The central bank spent $4 billion on bailing out nine lenders nine years ago to save the banking system from collapse.

“The corporation’s risk assessment and forensic investigation reports revealed that the erstwhile management of the failed Skye Bank contributed to its failure,” the NDIC said in a statement.

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.

The central bank had designated Skye as one of Nigeria’s systemically important banks due to the size of total deposits held after it acquired Mainstreet Bank. This meant it had to increase its capital ratio to 16 percent, the industry average. (Reuters)