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N30bn of our N70bn loan portfolio went to Transcorp, says Union Bank

By Gabriel Enogholase
BENIN—UNION BANK Plc, one of the banks, which management was sacked recently by the Central Bank of Nigeria (CBN) for non-functional loans, has said over N30 billion of the N70 billion credited to it was  lent out to Transcorp, in which the Federal Government owns 49 percent equity shares, to purchase NITEL.

However, the bank disclosed that it has recovered over N10 billion as debt from those who took loans from it in its renewed efforts to recover all outstanding loans owed it.

Disclosing this in Benin yesterday, the bank’s Deputy General Manager, Sir Peter Aliogo and Assistant General Manager (Treasury), Mr. Peter Omokaro, said that for a bank that was 93 years old, its fundamentals were still strong, despite the recent action by the Central Bank of Nigeria.

Both officials of the bank were part of a strong management team that was in the Edo State capital to assure customers and other stakeholders of the bank, that despite recent changes effected by the  apex bank, Union Bank Plc was still very strong, reliable, big and would continue to meet all its obligations to  them.

According to the bank officials, “we have recovered about N10billion and when you look at the list published by the CBN for all the banks, you can see that our figure is just insignificant and out of the N73 billion, N30billion was given to Transcorp.

Transcorp is 49 percent owned by the Federal Government and 51 percent by Transcorp and that money was lent out to Transcorps to acquire NITEL. Today, the Federal Government has taken NITEL back, making it 100 percent owned by the Federal Government.

“And when the Federal Government pays us that N30 billion plus interest which is being negotiated, you can see that there was nothing practically amiss.

“The number one bank in the world, Bank of America, was given money by the Federal Reserve Bank of New York and within one year, they paid off the loan and they marched on stronger.

“We are very liquid, we have assets. So, today, when you look at the assets, the shareholders’ funds are very, very safe. Union Bank has over 400 branches and employed over 2000 people. You can also see that despite the challenges, the customers still repose enough confidence in the bank. This is a bank that has created assets worth over N1 trillion”.

“We were to go to the market but because of the crisis, we could not go because the new regulatory issue is that there is a minimum capital that we must maintain. It was that right that the CBN exercised and we are on debt recovery to make  sure that we shore up our capital  within 90 days and measures are in place”.

The duo, while explaining that the shareholders and other stake holders of the bank stood to benefit more from the current on-goings in the bank, re-assured them that whatever was happening to the bank was just a passing phase.

They  added that “the value in the bank which makes them invest in it, the value creation of the bank which is able to generate enough revenue and declare enough dividends and bonuses still remain unshaken in spite of the current happenstance”.

The duo assured the shareholders that the bank would continue to pay its dividends and meet their obligations to them.


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