The management of Unity Bank Plc plans to invite the Economic and Financial Crimes Commission to help it recover the over N40bn debt owed by customers who have been failing to fulfil their loan obligations.
The Managing Director, Unity Bank, Mr. Henry Semenitari, who spoke to newsmen in Abuja on Thursday during the 2014 Customers’ Week, also said the bank had started allotting shares to shareholders who subscribed to its recent rights issue.
As a first step to recovering the debt, the bank has published a warning to the defaulting customers and plans to follow it up with the publication of their names as well as its employees responsible for the loans.
Semenitari said, “Historically, it was really bad but we have come up with a strategy. For the first time in the history of the bank, we have a very dedicated recovery team headed by someone at the general manager level and spread across regions.
“That is why you saw an advertisement in the press telling all debtors to come and make good all their accounts in two weeks. The truth is, in two weeks; failure to show up, their names and amounts owed the bank will be published, including staff members who were involved; whether former or current.
“The value of the debts is in excess of N40bn; about N40bn to N50bn with the interests un-serviced over the years. We have said that we will do everything within the law and I think the EFCC is an acceptable arm of the law to address your debts; so we will do that.
“There will be negotiations, of course. And whenever you negotiate loans, discounts come in; as long as you are not discounting at the expense of the bank. The issue of interest is in the inability of the customer to pay; that is why penal rates come and penal rates are legal. If you don’t service your debts for a period of time, penal rates come in.”
Semenitari said when the current management took over the running of the bank in January, the immediate priority was to address the issue of capital inadequacy of about N40bn and this was done through the rights issue that was oversubscribed.
He said, “The third challenge was the issue of cost; having a large network of over 250 branches means that we needed a business model that can sustain that level of cost. We had the challenge of cost recovery ratio; we had challenges on liquidity ratio and we had challenges of average cost of funds.
“On the issue of profitable branches, when we got on board; less than 50 branches were profitable. But today, out of the more than 200, over 75 per cent of our branches are posting profits. Our business model has been redefined such that out of 10 workers, seven are in the market and we are always right there in front of the customer.”
On the significance of the customers’ week, the Unity Bank boss said it was important to observe it as the customer was the reason why the bank or any other institution exists.