By Babajide Komolafe

LAGOS—STAKEHOLDERS of Union Bank, weekend, called for an inquiry to ascertain the true value of the bank, averring that the bank was not distressed.

The stakeholders said at a forum: “Before recapitalization there is need to know the present value of Union Bank assets and recoveries made after the intervention to date. The bank should come out with its own independent figures on its performance and not rely on CBN supplied figures since CBN intervention.”

The stakeholders meeting was attended by representatives of shareholders associations and their solicitors, pensioners, former directors, former members of general management and serving staff.

They faulted the categorization of non-performing accounts with particular reference to Union Bank according to CBN figures of August 14, 2009 which was put at N73billion, noting that N43 billion of this figure was sovereign and sovereign related debts guaranteed by the government for which no provision should have been made.

The stakeholders said other provisions for exceptional items included long outstanding un-reconciled items in addition to provisions for risk-assets/investment pension and gratuities, adding that the bank’s assets were undervalued and that a review of these provisions would show a true worth of the banks assets.

The stakeholders also kicked against any attempt to merge, acquire or sell the bank demanding that details of management’s plans to recapitalize the bank be provided to the stakeholders’ forum to enable them to discuss the recapitalization. They also insisted that staff and pensioners can recapitalize the bank and hence would resist any attempt to sell it to any group through the bank door.

A communiqué issued at the end of the stakeholders forum stated: “The Forum acknowledged the bank’s strength and insisted that the bank should not have been categorized with banks that fell under the hammer of the CBN on August 14, 2009, though the apex bank was commended for the swift intervention that did not allow a run on the affected banks. In effect the Forum asserted unequivocally that Union Bank is not distressed.

“The Stakeholders Forum faulted the categorization of non-performing accounts with particular reference to Union Bank according to CBN figures of August 14, 2009 which was put at N73 billion out of which N43 billion was sovereign and sovereign related debts guaranteed by the government for which no provision should have been made.

“The Stakeholders Forum noted that other provisions for exceptional items included long outstanding un-reconciled items in addition to provisions for risk-assets/investment Pension and Gratuities. The bank’s assets were thus undervalued and a review of provisions will show a true worth of the banks assets.

“The Stakeholders Forum resolved that the way forward should involve recapitalization of the Bank which was in the offing before the CBN intervention should commence in earnest as per stakeholders suggestion in the proposal sent to the CBN viz our letter of July 28, 2010; and compliance with the CBN Governor’s directive at the meeting of July 15, 2010 that the Bank’s Board should discuss the issue of recapitalization with their stakeholders.

“The Stakeholders identified challenges facing the Bank as injustice and lack of transparency on the part of both past and present management of the Bank; reluctance of management to listen to innovative ideas especially with regards to generation of deposits; and need to recognize human capital as an important asset that should not be carelessly disposed off in untimely retirements or layoffs as happened between 2006 and 2008.