Unity Bank Vows to Recover N40bn Bad Debts

James Emejo in Abuja
          
Managing Director/Chief Executive, Unity Bank Plc, Mr. Henry James Semenitari, has vowed to "do everything within the law" to redeem its non-performing loans (NPL) portfolio currently valued at between N40 and N50 billion.

It follows a two-week ultimatum issued by the bank to all its debtors to pay up or face punitive measures, including outright ban from banking transactions through blacklisting, and involvement of the Economic and Financial Crimes Commission (EFCC) in the recovery exercise.
Speaking to journalists in Abuja at the bank's headquarter, shortly after personally attending to customers as one of the tellers to mark this year's Customer Service Week, the Unity Bank boss said it had nevertheless been able to surmount the challenges of capital erosion, costs and issues around the customer-end business.

He also said it has enjoyed "very strong goodwill across the country" as one of the oldest banks.

According to him, total inflow of fresh capital for the business currently stood in excess of N40 billion helped by its recent rights issue which was oversubscribed.

He added that the bank had now been properly and fully capitalised while its cost structures and weighted average cost of funds, which had been a huge challenge for any retail bank had also dropped to between 4.8 percent and five per cent.

Semenitari said more than 75 per cent of its over 200 branches had now returned to profitability since the new management came on board compared to only about 50 branches which were hitherto profitable.

He added that its business model had also been redefined to have more staff attend to customers.

He however, admitted that the bank has had to slow down its lending activities as a result of the bad loan portfolio, and drive its revenues more from the cost lines.

He said:"You see, as a huge network, one of the strategies we have adopted in the last nine months is to ensure that virtually every branch within our network receives some payment daily that is positive...So for now 80 per cent of our revenues are cash profits."

However, while maintaining that the bank's capital had largely been eroded by its NPL portfolio prior to the assumption of the new board, he said a dedicated recovery team headed by General Managers had been created to recover the debts spread across regions.

"That's why today you see an advert in the papers telling all debtors to come and make good their accounts in two weeks", he said. “The truth is in two weeks, failure to show up, all recalcitrant debtors would be resisted and their names and amount would be published including staff who are involved, whether ex or current staff."

"The value of outstanding bad debts should be in excess of N40 to N50 billion with a whole lot of interests over the years unserviced. We would do everything within the law and luckily 90 percent of our customers are Nigerians, they are in this country, we know them and know where they are. The good news for the industry today is that the current management of CBN is very serious about addressing bad debtors. If you forward names and they confirm, you are blacklisted."

Meanwhile, commenting on the significance of the customer service day, he 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.

"They are the backbone to the survival of any retail business whether food, manufacturing, banking, telecommunication. So it's a very important day not just to celebrate the customer but also to get a feed back on how we can service them better."
 

Culled from thisdaylive.com