Kelvin Egerue
8 November 2009
Group Managing Director and Chief Executive Officer of Union Bank of Nigeria Plc, Mrs. Funke Osibodu, has doused tensions surrounding the fate of the old-generation bank, declaring that Union Bank was not being prepared for sale.
In the alternative, Mrs. Osibodu said Union Bank was on the threshold of re-enacting its old winning ways. She insisted that all current efforts by the new executive management were geared towards repositioning the bank.
The Union Bank boss who made the clarifications in an interactive session with senior journalists in Lagos at the weekend denied allegations that an auditing firm, KPMG was preparing the bank for sale.
"Yes, KPMG is currently working with us as part of the international processes of trying to ascertain things. KPMG is conducting both investigative and diagnostic auditing to review the books and it is helping us to know what has happened to our capital. They are not the only people working with us. As you know, the officials of the Economic and Financial Crimes Commission (EFCC) are also helping us. We are learning from these exercises. But I can assure you that the bank is not being prepared for sale", Mrs. Osibodu said.
The GMD who informed that she has spent her first two and half months at Union Bank trying to reactivate what she described as the business side of the bank said attention is now been shifted to the risk side of its activities.
It would be recalled that Mrs. Osibodu took over the realms of power at Union Bank August 14 following the sack of executive managements of five banks by authorities of central Bank of Nigeria (CBN) on allegations of financial strains in their systems. CBN had identified no fewer than N740 billion non performing loans in the books of the five banks comprising Afribank, Finbank, Intercontinental Bank, Oceanic Bank and Union Bank.
Mrs. Osibodu revealed that Union bank has so far recovered N31 billion of its debt portfolio pointing out that the bank has set a target of N50 billion recoveries be the end of this year.
She described the recovery of loans from Transcorp as the biggest gains to accrue to the consortium of five banks that facilitated the deal from the reform initiative embarked upon by CBN.
Investigations showed that the Transcorp loan repayment deal came in two shades of cash and promissory note from the federal government at an interest rate of 8.67 per cent.
"The banks could have sold Trascorp. The consortium of five banks is indeed the biggest beneficiaries of this trouble" she reiterated.
According to her, Union Bank will soon embark on the liquidation of assets of some of the loan defaulters as part of strategies for recovering such loans.
She said efforts at reducing costs, streamlining issues and improving customer satisfaction are yielding results. Operating costs she said would be reduced by 30 per cent before the end of this year.
Mrs. Osibodu identified the cost of power generation as one of the major cost outlays.
"We have saved N30 million from the purchase of diesel for the head office since August. We have been wondering why we will give loan to major oil marketers only for us to be buying diesel from retailers. Our target now is to save about N300 million from the purchase of diesel for the head office within one year" the GMD observed.
She assured that before the end of 2009, the issues relating to delays in the issuance of Automated Teller Machines (ATM), cheque booklets, online transaction from every branch of the bank, uploading of customer mandated, call over and proving of accounts would have been resolved.
"Call over is not been done every day leading to errors. Things like proving of accounts, these are standard practices that have been there before but are no longer been followed" she regretted.
She assured staff of the banks that management was in no way thinking of mass retrenchment.
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great move by the GMD, and good that this issue has being clarified by her,her efforts are laudable,we hope she carry through her goals,and hope she has a good plan for the contract staffs
The reforms in UBN PLC is welcome. The emergence of Funke has exposed a lot of unacceptable activities especially buying diesel from the same people that were granted a huge amount of loan. Now let me ask 'are the past executives not aware of all these or were they only interested in themselves and what to grab?... I need an answer please . Thanks