UBA, Zenith acquire Gulf, Eagle Banks

Akin Adewakun and Odidison Omans, Lagos - 15.01.2008

UNITED Bank for Africa (UBA) on Monday in Lagos acquired Gulf Bank under the Purchase and Assumption (P & A) transaction. Zenith Bank also acquired Eagle Bank. This acquisition by UBA brings the number of failed banks acquired by the bank to five, having earlier acquired the failed Trade Bank, Metropolitan Bank, City Express Bank and African Express Bank.

In his remarks at the handing over ceremony, the Managing Director and Chief Executive, Nigeria Deposit Insurance Corporation (NDIC), Alhaji Ganiyu Ogunleye, expressed joy that the customers of Gulf Bank would now have access to their deposits without any conditions attached.

He noted that the objectives of the P&A included facilitating continuity of banking services in the acquired business premises of the failed banks, encouraging depositors of the failed banks to continue to maintain bank accounts with the acquiring banks and promoting banking culture, which he described as a critical savings mobilisation development.

With the latest acquisition, he stated, UBA had assumed N7.9 billion private sector deposit liabilities made up of about 38,500 accounts, adding that through the P&A arrangement, private liabilities of 10 failed banks amounting to N72.5 billion had been resolved.

According to him, N3.3 billion out N5.2 billion insured deposits of the 34 of the 36 banks that failed before 2006 had been resolved, adding that the corporation had also declared a liquidation dividend to the tune of N11 billion in favour of uninsured depositors out of which N6.1 billion had been paid to them.

While expressing the corporation’s concern about the plight of depositors of all failed banks, the corporation’s chief executive added that the corporation had not been able to make payments to depositors of four banks, namely Savannah Bank, Peak Merchant Bank, Societe Generale Bank and Fortune International Bank due to cases instituted by the owners and directors of these banks.

In his response, Executive Director, UBA, Mr. Godwin Ize-Iyamu, while commending the CBN and the NDIC for the humane policy which had led to orderly transfer of private sector depositors from banks under liquidation, noted that a major thrust of the policy was that the private depositors could now access their full deposits as against the usual practice of being obliged to pay a limit of N50,000 of the account for receiving their deposits, adding that this had led to increased confidence in the banking industry.

He stated that the bank, along with three other big banks in the industry, paid a premium of over N1 billion on deposits at the bank to NDIC every year, adding that the bank had, through past acquisitions, added about 130 branches to the branch network, while at the same time increasing its deposit base.

He said that UBA would commence the verification of depositors on January 21 this year while payments would commence on January 28. In a similar development, failed Eagle Bank was also formally handed over to Zenith Bank Plc., by NDIC in Lagos on Monday with N890 million private sector liability.