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5 troubled banks say debt recovery is ongoing

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By Peter Egwuatu
Five troubled banks whose managing directors and executive directors were sacked barely five weeks ago by the Central Bak of Nigeria (CBN) for alleged misuse of shareholders’ funds,  have assured depositors and investors  that their money was safe and protected and the debt recovery exercisewas ongoing.

SANUSI
SANUSI

The new managing directors of the five troubled banks who briefed capital market community  last weeksaid the recovering  of debts owed the banks was ongoing and that effort is being intensified to ensure that debtors meet their repayment obligation.

Mr. John Aboh, Managing Director of Oceanic Bank International Plc while revealing the state of the bank said, “ I resumed office on 14 August 2009, the same day the former managing director, Mrs Cecilia Ibru was sacked by the CBN. I discovered there was concentration of risk assets which was not performing. I met poor corporate governance structure, demoralizing staff. There was a lot of uncertainty by the staff  as to who will be sacked or retained. I don’t want to run a bank like this. In the first one week I resumed duty there was tension and there was hike in the withdrawal of money. But after three weeks, when normalcy came and the people saw that the bank is still performing its operations, the customers started returning the money to the bank. I can say we have stabilized.

“ In terms of loan recovery, the debtors have gradually been responding. We have N20 billion of the bad loans recovered. We are focusing on the retail banking services where we will have a large pool of borrowers.  We are moving forward on daily basis. We are making profit. Those who are selling Oceanic Bank shares are selling at a loss, while the buyers will make huge profit in the long run.  This is the time to buy if any. But If  I were to be those selling I will rather buy than sell because the bank has potentials.

In his own response, Mrs. Susan Iroche, Managing Director, Fin Bank Plc, said, “ Fin Bank is the smallest of the five troubled banks. So our debt recovery might not be too fantastic as those big banks. All the same, we making efforts to recover as much debt as possible. My aim is to stabilize the bank and make sure there is no run . When I resumed we work throughout the week and even weekend. The bank is safe, though we experienced mass withdrawal at the initial stage, but now there is no panic. “The next step we are taking is how to restructure the bank. Meanwhile, N5.5 billion has so far been recovered from the bad loans, that is to show you how small the bank is. We have contacted our foreign correspondents banks to assure them that the banks was not distress. Nobody has pool out their lines of credit. We would ensure we operate in consonance with corporate governance. Already we have strengthened our debt recovery drive.

We have put more resources to the unit that will drive the debt recovery . Risk management will be looked into and be addressed in no longer time and we would ensure we control costs in all our activities.”Managing Director of Union Bank Nigeria Plc, Mrs. Funke Osibodu, said, “ When I resumed work , I first met with next level of management staff and discussed how to move the bank forward. The staff have been very supportive. You know the bank has been slow to act. In our processes we are slow but this is the thing we have to address. During the first one week of my resumption, we had a slight negative effect like withdrawals of money by customers. But after two weeks, we started getting positive response.

I met concentrated credit and if we had recovered them we would be talking of 50 to 60 per cent debt recovered. But at the moment ,we have recovered 10 per cent of the bad loans. But our target is to recover 30 per cent of the bad loan. The bank needed to be reformed . We are working with consultants which will look at the branding, physical outlook of the bank, customer service and so on. “We needed to change the way we manage our operational risk. Our people need modern approach and outlook. We have recruited 200 young graduates, prior to this the bank had recruited 200 people and they are undergoing training. These people will be added to our existing staff to bring the much needed chnage.

“We are property bank. There is a lot going to happen there. We are not strong in retail and Information Technology (IT), but we would try to strengthen our retail business. We have strong presence in wholesale business, government and agencies support.”

In his own speech, Managing Director, Afribank Nigeria Plc, Mr. Nebolisah O. Arah said, “ My mission is to stabilize the bank, strengthen it and return confidence. We are going to embrace transparency and improve corporate governance.Meanwhile,  weekend,it was gathered, from Economic and Financial Crime Commission (EFCC) that a total of N92.9 billion has been recovered so far.

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