Business

Union Bank groans under heavy debt burden

Published

8 years ago

June 20, 2018

By Odunewu Segun

While Union Bank has never been known to be distressed at any given time, its books in recent years have left much to desire, National Daily has learnt.

Recall that the bank was among some banks who had missed the March 31^st deadline by the Nigerian Stock Exchange in April for submission of their 2017 audited financial results.

The bank in a notice in May blamed the delay on the finalization of its 2017 Audited Financial Statements (AFS) with regulators and external auditors.

When it finally released the result on May 10, the bank’s profit dipped by 4.5 per cent.

Earnings per share also dropped from N0.92 in 2016 to N0.81 in 2017, amounting to a 11.9% fall year on year.

National Daily gathered that the bank has been groaning under heavy burden of bad debts that would have it under if not for forceful intervention of Asset Management Company of Nigeria (AMCON).

It is presently in court battling hard to retrieve a whooping sum of N5.4 billion debt owed it by Osigwe Foods and Agro Industrial Limited, which has prominent pillars of high society like Prince Tony Momoh, Vice Admiral Akin Aduwo, Chief Felix Dokpesi and others, on its board.

Union Bank had granted the loans, totaling N4.9 billion as far back as 2007, which now stood at N5.4 billion as at February this year. Osigwe Foods only admitted indebtedness of N1.6 billion.

Union Bank is also on the trail of the once rumbustious Stella Oduah, former Aviation Minister, as she has been at the receiving end of a litigation that might strip her of valuable properties if the court adjudicates against her.

The mortgage lending arm of Union Bank Plc, Union Savings and Loans, filed an application praying the federal high court to join it in the ongoing suit between AMCON and Oduah’s company.

Several properties belonging to one of her companies Sea Petroleum Oil and Gas Group Limited has been seized by AMCON through a court order and placed under receivership.

The mortgage lender through its lawyer Barrister Ken Ahia claimed that some of the properties seized by AMCON were used as by Stella, Star Properties and five of its directors to secure various mortgage loans between December 2009 and November 2010 amounting to N385, 750,000.

Only time will tell how successful the first generation bank will be in its new drive to recover some of these loans which allegedly should not have been granted in the first place.