By Chinedu Ibeabuchi
The new management of Oceanic Bank Plc said it has recovered bad debt owed the bank to the tune of N41 billion within the last three months, which has significantly resulted in its investorsâ€™ deposit base growing by 23 per cent.Â This amounted to about N528 billion as at 30 November 2009, from N430 billion it was in August, prior to the sack of the bankâ€™s former management team.
In an interactive session with the press, Tuesday, Managing Director/Chief Executive Officer, Oceanic Bank International Plc, John Aboh, said the bank was aspiring to recover an additional N60 billion by February next year from the remaining N165 billion owed the bank by debtors. Though he said that the large size of insider related loan posed a challenge in the bankâ€™sÂ recovery plan, discussions were, however, under way to recover the insider loans which have accounted for between N5billion to N6 billion of the money recovered.
He noted that the bankâ€™s current status will be duly reflected in its soon-to-be published 3rd quarter financial statement which, according to him, promises to be historical and will demonstrate the new managementâ€™s level of transparency and accountability.
It will be recalled that the Central Bank of Nigeria had in August this year sacked, among four other banks, the management of Oceanic Bank for poor corporate governance and endangering depositors’ fund, and had subsequently replaced the management with a new one.
The Managing Director said that the board and management were doing a comprehensive review of the bankâ€™s assets in order to reduce liability. This, according to him, will be achieved through rationalising of cost. The bank plans rationalising its cost by strengthening its retail banking and reducing unessential overheads, eliminate poorly performing subsidiaries, and invest in technology and project management methodologies to introduce process automation in operations.
â€œFor example, we have 180 branches under construction and various sums of money have been pumped into it. We shall look at the ones that are viable and dispose the ones that will not meet shareholdersâ€™ value. Likewise, existing branches will be driven by capital performance. Those not performing well and within cluster would be merged for better efficiency. Thus, we shall be embarking on cost optimization,” he said.
Though he debunk the claim that this might affect its labour force but he said the bank will streamline its human resources with revenue generated. â€œThe driving force is that we must cut our coat according to our size. We will streamline our banking performance with labour force.
There is no intention of disengaging anyone but if liquidity ratio is not as we expect, some will have to go but we shall engage in relevant consultations before anyone can lose his job. We will maintain a data base that will give consideration to the people who might have to go.â€
The managing director said that the bank will maintain robust banking by addressing liquidity through its retail deposit, public sector deposit, loan recovery and the recapitalisation of the bank.
â€œWe have succeeded in sending a clear message to the banking public of our commitment to good corporate governance and high ethical standards. Management has evolved a recovery plan for the Bank which hinges on the recovery of classified loans, revenue generation, expense reduction, liquidity generation, deposit growth, overhaul/upgrading of risk management systems and recapitalization, as a basis for resuming our growth,â€ he said.