EFCC May Help Unity Bank To Recover N40bn Bad Debts

Managing Director, Unity Bank Plc, Mr. Henry  Semenitari, has promised to do everything within the law to get back bad loans from customers up to N40bn, even if it means asking the Efcc for assistance in recovering these loans from customers who have simply refused to make any commitment whatsoever in paying back facilities they had received from the bank. The management of Unity Bank Plc aim to get defaulting customers to make serious commitment to their loan obligations.
Managing Director/Chief Executive, Unity Bank Plc, Mr. Henry James 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.

Mr Henry 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. Still on the importance of the customer service day, Mr Semenitari also said: “It is pretty important that for a service business like banking driven by the customer, dedicating a day for customers, for me is not even enough. It’s supposed to be a fully week with various activities to delight the customer and at least say thank you.”

According to him, “There’s no bank which prints money, everything in the safe here is customers’ money. Now for retail banking in particular, it is a traffic business. So those who generate the traffic need to have a dedicated day. One thing is clear, Mr Semenitari is positioning Unity Bank as one of nigeria’s biggest and strongest banks ever.

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