Emeka Offor, Abike Dabiri’s Firms, Others Owe Banks N143.81bn

Culled from Punch

Nigerian Deposit Money Banks on Monday continued with the
policy of naming and shaming their delinquent debtors with further publication
of the names of firms and their directors whose loans have become
non-performing for more than one year.

While nine banks published the names of the loans defaulters
on Monday, four banks released the lists of their chronic debtors, owing a
total of N143.81bn, on Tuesday.

The four banks are First Bank of Nigeria Limited, Access
Bank Plc, Diamond Bank Plc and Unity Bank Plc.

The banks, which had published the list of their delinquent
debtors on Monday were Zenith Bank Plc, Guaranty Trust Bank Plc, Union Bank
Plc, Sterling Bank Plc, Skye Bank Plc, Fidelity Bank Plc, Stanbic IBTC Bank,
Heritage Bank Limited and Enterprise Bank Limited.

First Bank, which has its total amount of non-performing
loans as N43.72bn, published 92 names of delinquent debtors.

The first five companies on the lender’s list owe a combined
sum of N23bn. These are Ajaokuta Steel Company Limited, Starcomm Plc; BGL
Securities Limited, where a former Minister of Finance and National Planning,
Kalu Idika Kalu, is a director; Shield Petroleum Limited and Fargo Petroleum
and Gas Limited.

Shield Petroleum, the number one on the list, owes N6.883bn;
while Zurich International Service, the last on the list, owes N26.69m.

Unity Bank also released 260 names of delinquent debtors
with a combined NPL figure of N45.52bn.

The list has the companies of some prominent Nigerians.
These include Umar Mutallab’s DeanShanger Project Limited, N3.6bn; Senator
Ayodele Arise and a former Minister of State for Works, Mr. Dayo Adeyeye’s
International Payment Devices Limited, N81.9m; and Prince Adeyanju
Olateru-Olagbegi’s Cupid Investment BDC, N90.1m.

Other prominent companies on the list are Ekiti Kete Mass
Transit, which owes N991m; Fargo Petroleum and Gas Limited, N2.5bn; Ava Cement
Limited, N.8bn; and Plywood Chemical and Accessories, N1.1bn.

Ava Cement topped Unity Bank’s debtors’ list with N9.8bn,
while Malcolm Akpokodje owes the least with N20m.

Access Bank Plc published a list of 11 delinquent debtors,
with a combined NPL figure of approximately N3.4bn.

Top on the list are Bioka Ventures Limited, which owes
N1.15bn, while Derukas International Limited was last on the list with a debt
of N56.3m.

Diamond Bank Plc has N47.17bn as its total NPLs, with
companies belonging to prominent Nigerians owing sizeable amounts.

These include Sir Emeka Offor’s Global ScanSystem Limited,
which the bank says owes N181m; a former Chairman, House of Representatives
Committee on the Diaspora, Mrs. Abike Dabiri-Erewa’s Thriller Eneavours, which
owes N122m; and a former Delta State Commissioner for Sports Solomon Ogba’s
Delta Mega Trend Limited, which owes N89m.

Aside the 13 banks which have published their debtor lists,
other banks which will publish theirs this week are Ecobank Nigeria, First City
Monument Bank Limited, Standard Chartered Bank, Keystone Bank Limited, United
Bank for Africa Plc and Wema Bank Plc.

Investigations by our correspondents on Monday revealed that
most of the banks had cut their list of delinquent debtors due to litigation
with their customers over disputes arising from loan terms and last-minute
renegotiations by some clients.

A top bank executive, who spoke to one of our correspondents
under the condition of anonymity, said, “Some of the banks have to remove the
list of some clients due to issues that border on litigation.

“Some names were removed at the last minute after the
affected customers came to renegotiate with us. Some banks have had to cut the
names on their debtors’ list by at least 50 per cent.”

Officials of banks, who spoke to our correspondents, linked
the relatively high figure of the NPLs in some banks to inside connivance with
customers, lingering margin loans and huge oil and gas-related loans.

According to them, customer relationship managers in some of
the banks connived with the customers to obtain huge loans that eventually
became bad.

They also said that long-standing margin loans in some banks
were responsible for the high figure.

“A huge chunk of the loans are oil and gas related. The drop
in oil prices has also worsened the situation for some oil and gas companies.
They borrowed relatively large amounts of money, which later became bad loans,”
an official of a tier-1 bank told our correspondent.

Meanwhile, the Asset Management Corporation of Nigeria will
publish the list of its debtors early next week if they fail to regularise the
terms of their loans with the agency.

The spokesperson for AMCON, Mr. Kayode Lambo, who confirmed
this on Monday, said companies which failed to regularise the terms of their
loans with the agency would have their names published.

“As many companies who have not been servicing their loans
will have their names published,” he added.

The names of firms belonging to prominent Nigerians who have
not been servicing their loans may appear on the list.

In 2009, the Federal Government spent about N5tn to buy the
NPLs from banks to save them from imminent collapse.

AMCON, the government agency created after the 2009 banking
crisis, was the special purpose vehicle used to acquire the NPLs from the
banking sector.

The Central Bank of Nigeria had on April 22, 2015 directed
the banks, discount houses and AMCON to publish the list of delinquent debtors
from August 1.

They are to publish the names in at least three national
newspapers on a quarterly basis.

In line with the directive, the banks gave the chronic
debtors a three-month grace period, which expired on July 31.

The Director, Banking Supervision, CBN, Mrs. ‘Tokunbo
Martins, had in a circular dated April 22, 2015, said, “In order to ensure that
the industry NPL ratio does not exceed the prudential limit of five per cent
and to improve the credit culture in the banking industry, banks and discount
houses are directed to observe prudent credit underwriting and monitoring
standards.”

The debtors are those whose accounts have been classified as
lost and include persons, entities, directors, subsidiaries and other related
parties, according to the central bank.

The central bank had stated that delinquent debtors in the
category described above would be blacklisted and “banned from participating in
the Nigerian foreign exchange market and in the Nigerian government securities
market.”

The Punch had on March 15, 2015 reported that the volume of
the NPLs in the Nigerian banking industry was set to rise further on the back
of the devaluation of the naira amid weak global crude oil prices.

Global rating agency, Fitch Ratings, had in February, after
the second round of devaluation of the naira, predicted that the banks’
non-performing loans would rise above the CBN’s five per cent limit by the end
of this year, but below 10 per cent.