UBA: Providing succour to failed banks’ victims

Akin Adewakun, Lagos

From left, Alhaji Umaru Ibrahim, Executive Director,
Finance and Administration, NDIC, Mr Ibrahim Jega,
Executive Director, UBA Plc and Mr. Emmanuel
Nnorom, Director, Group Executive Office, at the
formal handing over of African Express Bank
(in liquidation) to UBA on Tuesday.

UBA is relentless in its efforts towards ensuring that Nigerian depositors do not suffer from the agony of failed banks. So, the bank is ready to support NDIC towards ensuring that many more customers of liquidated banks are provided access to their deposits."

Those were the exact words of the Executive Director, UBA Plc, Alhaji Ibrahim Jega, at the formal handing over of the liquidated African Express Bank Plc, Afex Bank, in Lagos, recently.

The acquisition of Afex Bank, under the Purchase and Assumption arrangement of the nation's financial regulatory bodies, the Central Bank of Nigeria and the Nigerian Deposit Insurance Corporation, (NDIC), brings to four the number of liquidated banks in the stable of the bank. UBA had earlier acquired Trade Bank, Metropolitan Bank and City Express, under the same Purchase and Assumption arrangement.

The implications of this development would, without doubt, have a far reaching effects on the financial sector, as well as aid the nation’s economic growth. For instance, not a few experts in the industry expressed their reservation at the prospects of the CBN’s reform agenda during the consolidation era in the banking sector.One of the arguments had been the probability of the reform worsening the nation’s already ailing economy since consolidation, according to them, would imply job losses for staff of those banks who would eventually not be able to make the N25billion mark. The reform, they had argued, might also lead to loss of public confidence in the sector since those who might have their funds trapped in the failed banks might develop apathy towards the industry.

The recent arrangement has, no doubt, provided light at the end of the tunnel and put paid to the postulations of the school of thought of those who believed that nothing positive would come out of the re-capitalisation process.

For instance, this acquisition, apart from restoring hope to about 16,460 account holders of the failed bank, who had been going through trauma by virtue of their funds being trapped in the vaults of the bank, has been able to restore confidence in the banking institutions in tune with one of the objectives of the Purchase and Assumption transaction.

While highlighting how far the Corporation had gone in ameliorating the plights of failed banks' customers, the Managing Director of NDIC, Chief Ganiyu Ogunleye, had described the acquisition of the defunct Afex Bank as ‘a fulfillment of the need to achieve full protection of private sector depositors; the continuation of banking services to customers of failed banks and the restoration of public confidence in the banking and financial services system’ as encapsulated in the cardinal objectives of the Purchase and Assumption bank failure resolution mechanism.

Therefore, the acquisition of the defunct Afex Bank, which encapsulates the purchase of some fixed assets, branch network and assumption of private sector deposits, but completely excludes public sector deposits, other creditors as well as contingent liabilities, can be described as almost fully living up to these objectives.

For instance, with the total private deposits of the four closed banks acquired by UBA put at N16.99bn out of which those of the defunct Afex Bank amounted to N6.4bn, and with N9bn already paid out to customers of the earlier acquired banks, not a few financial experts believe that the bank is really determined to restore the lost glory of the banking industry by restoring the fading public confidence in the institution.

Another positive development arising from this is the fact that sacked but employable staff of those defunct banks are gradually finding their ways back to the industry. Some of them have benefited from this arrangement by being privileged to be re-absorbed by the acquiring bank.

'We have employed several of the staff of those defunct banks found employable. UBA is a large bank with about 600 branches nationwide. And, the process is ongoing,' stated Alhaji Ibrahim Jega, Executive Director, UBA.

Though the bid for two of the remaining six banks is said to be at various stages of evaluation, UBA is ready to play the Oliver Twist by expressing its willingness to participate in the liquidation of the other four remaining banks, if and when the chairmen of those banks decided to withdraw their suit challenging the revocation of their banking licenses at the court.

No doubt, UBA's commitment to giving its customers excellent services is unwavering. For instance, while it had paid out about N9bn to customers of the acquired failed banks, it intends to start the verification of the deposit claims of the new acquired bank in the next few weeks, with the hope of commencing payments.

Unity pays! Slogan or reality?

By Sulaimon Olanrewaju

The last has certainly not been heard of the recent consolidation exercise that was carried out in Nigeria’s banking industry, and its aftermath. The Nigerian banking industry now has the distinction of actually merging, several banks in a record 14 to 18 months, a period far shorter than analysts would have expected banks to merge. Many analysts had said that consolidation could only take place effectively after some four to six years.

Incidentally, the mergers are working, so far. Only last week or thereabout, 12 Nigerian banks teamed up with another 9 international banks to put together a syndicated loan facility of $2 billion for MTN Nigeria. Could a feat of this magnitude have been pulled off two years ago when banks generally struggled with inadequate capitalisation? Not likely.

Unity Bank is a product of the consolidation programme.In the aftermath of its merger, nine different banks had dissolved into the new Unity Bank. Despite the large number of formative banks, the Unity Bank drivers, under the leadership of Falalu Bello, appear to be very determined to hold their own in an increasingly competitive marketplace.

For instance, the bank is on record as a bank that has never experienced a total or bank-wide IT failure. Its IT structure has been harmonised across its entire organisation despite the fact that it is an amalgam of nine original banks, which hitherto ran on different systems and software.

Many bank customers across Nigeria will regale you with tales of the pains, inconvenience and frustrations they have gone through when their banks experienced IT failure, sometimes lasting for as long as three weeks nationwide. The IT infrastructure of Unity Bank has under the specialist guidance of Evans Woherem, one of the leading lights of Nigeria’s ICT sector, been painstakingly harmonised across the country to the delight of its customers and its workforce.

If therefore the bank has never experienced a bank-wide IT failure like many other banks, it may be appropriate to say being a Unity Bank customer pays.

The bank also has branches, more than 200 of them spread across the country, such that wherever you are in the country, you may carry out your banking transactions with relative ease as there is every likelihood of a Unity Bank branch being nearby. So, in term of its wide branch network, again it would be appropriate to say Unity Bank pays.

Its people are also friendly, very friendly. Enter a Unity Bank branch and you will be surprised at the absence of rude security men asking you to put off your phone or even harassing you with barking dogs. Instead, you encounter well trained security personnel, who have been trained to see you as a friend and welcome you accordingly. The bank has since commenced a strategic programme of extending the Unity Bank pays value proposition even further.

Recently, it released a new product known as Unity PAYS. PAYS is an acronym for Personal Advance for Your Success. In a nutshell, it is a credit facility available with which consumers can purchase whatever they desire.

In so doing, all the consumer is requested to do is make an initial 20 percent payment of the total value of whatever he wishes to purchase. Thereafter, the bank provides the balance and enables the customer make the purchase.