Lagos — Private depositors of the failed Liberty Bank can now smile as the United Bank for Africa Plc (UBA) yesterday formally acquired the bank under the purchase and assumption (PA) transaction.

With the handing over of Liberty Bank to UBA Plc by the Nigerian Deposit Insurance Corporation (NDIC), the liquidator, "UBA Plc assumed N1.7 billion private sector deposit liabilities made up of about 19,604 accounts, said the NDIC Managing Director/Chief Executive Officer Mr. Ganiyu Ogunleye at the handing over ceremony in Lagos.

However, the liabilities inherited by UBA clearly exclude public deposits and the taxes liabilities previously held by Liberty Bank.

NDIC was appointed the liquidator of 11 of the 14 banks whose licences were revoked in January 2006.

The deal has increased the number of failed banks acquired by the UBA to six having acquired Trade Bank, Metropolitan Bank Plc, City Express bank, African Express Bank and Gulf Bank.

Oguleye noted that it is not mandatory that all the private depositors' maintain their account with the UBA.

He said UBA should ensure the private depositors of the failed bank have easy access to their monies without conditions.

The P&A arrangement gives depositors easy access to funds unconditionally, facilitates continuity of banking services in the acquired business premises of the failed bank, and encourages the depositors of the failed bank to maintain banking relations with the acquiring bank.

Ogunleye noted that through the P&A, the "private deposit liabilities of 11 failed banks (Liberty inclusive) amounting to N74.20 billion have been resolved accounting for 88 percent of the N84.5 billion private deposits liabilities of the 13 banks."

He also gave further clarification of the 34 banks (those without legal hurdles) out of the 36 failed banks before 2006.

According to him: "The 34 banks had N5.2 billion insured deposits out of which N3.3 billion has been paid. Apart from the insured deposits, we have declared liquidation dividend to the tune of N11 billion in favour of uninsured depositors out of which N6.1 billion has been paid to uninsured depositors."

He said. "It is on record that depositors of 11 of the 34 banks have received 100 percent liquidation dividends which indicated full recovery of funds. In some of the other banks in liquidation, dividends as much as 90 percent have been declared in favour of their depositors."

He said:"Creditors of some of the 34 banks have also received substantial liquidation dividends while the shareholders of the three banks, Alpha Merchant Bank, Nigerian Merchant Bank and Pan African Bank, have received liquidation dividends of N600 million, N620 million and N293 respectively."

On why payments to depositors of savannah Bank, Peak Merchant Bank, Nigerian Merchant Bank and pan African Bank, has not been effected, he said until the pending court cases are determined, NDIC cannot do otherwise, thus depositors should hold the owners and directors of those banks responsible.

Taking over Liberty bank, the Managing Director /Chief Executive Officer UBA plc, Mr. Tony Elumulu, commended NDIC saying its a good thing depositors of failed banks can now get all their deposits bank as against the previous tradition of giving them N50,000 or N100,000 as the case may be.