REVEALED: Who Is Who On Lists Of Big Bank Debtors; Chronic Debtors Owe Skye, Diamond, Sterling, Fidelity Banks N70.51bn

Emefiele of Central Bank of Nigeria

The Nation reports banks are exposing the businesses and people behind the mountain of debts threatening to kill the sector – courtesy of a Central Bank of Nigeria (CBN) directive that expired at the weekend. Barring unforeseen developments, some of the banks will begin the publication of their debtors’ list today. The publications are coming on the heels of the July 31, 2015 deadline set by the apex bank for the debtors to pay up.

The list, an official of one of the banks said, is just a part of the whole.  “Some debtors have entered into various payment schemes to avoid being shamed by this exercise,” the bank official, who pleaded not to be identified because of “the sensitivity of the action”, said.

The debtors are to be blacklisted and banned from participating in the foreign exchange market as well as trading in the Nigerian Government Securities market. The publication of the debtors’ lists is to be a continuous exercise.

The Nation report continues:

Union Bank is owed huge sums by 176 debtors. Six customers collectively owe the bank N27.91 billion. They are Dec Oil & Gas, owing N15.7 billion following a 1999 contract finance loan that expired in 2000. The directors of the company are Patrick Ugboma and Pius U. Malaka.

Other debtors include Alliance Energy, which owes the bank N4.92 billion. The term loan approved in 2004 expired 2006. The directors are Akinwale Omoboriowo, Kojo Anan and Timi Austen-Peters.

Hajaig Construction owes the bank N2.99 billion on a loan approved in 2012 and which expired in 2014. The directors are Abdul Nasser Hajaig, Rud Wan Hajaig and Mohammed Hajaig.

Sapta International Industries Limited owes the bank N1.87 billion over a 1987 term loan that expired in 1988. The directors are Alex Aloy Nwokodikwa and Clement Nwokodikwa.

Petroleum Project International has a debt of N1.25 billion over a term loan obtained in 2004 that expired in 2007. The directors are Akinwale Omoboriowo, Kojo Anan and Timi Austen-Peters.

Best Aluminum owes N1.11 billion for import and lease facilities obtained between 2010 and 2012. The directors are Chief Godwin Nweke and Chief Pius Nweke.

Fidelity Bank’s debtors include the telephone firm Starcomms Limited, which owes N3.08 billion cumulatively in the three accounts it runs with the lender under the same name and directors. The first account, which got in 2009 an overdraft which expired in 2014, is owing the bank N1.68 billion; the second account, a term loan approved in 2011 and which expired in 2014, is indebted to the tune of N1.16 billion. The third account, also an overdraft approved in 2007 and expired 2014, is indebted up to N239.65 million. The directors are Chief Maan Lababidi, Paul Edwards, Tajudeen Dantata, Omar Lababidi, Dr. Chris Ogbechie and Olusola Oladokun.

Fidelity released a list of 28 customers with “delinquent” loans. Other customers include Kesio Associates, which owes the bank N328.1 million and Diesel Solutions (N324.28 million). Patemglobal Limited owes the bank N268.5 million.

Kasolute Nigeria Limited owes Sterling Bank Plc N475.3 million over an overdraft loan approved in 1999, which expired in 2000. Just Jays Limited owes the bank N254.7 million; Alcun Industries Limited owes N192.1 million. G.Cyrus Global Resources  is owing the bank N187 million.

One bank executive told The Nation that many of the banks offered some debtors who made moves to settle “their long-outstanding loans the option of rescheduling, or making part-payment of the loans.

“Those that have reached this understanding with their banks have their names removed from the published debtors list, “he said, adding that the other category whose names are missing from the list, are those that are contesting their indebtedness in the courts.

“The CBN has directed that all cases that are in the purview of the courts should be reserved for judicial determination and resolution,” the official said.

He said the Loan Recovery Units of the banks were still working hard, compiling the list of other debtors. “This publish and shame strategy would continue, as the next category of NPLs falls due, except otherwise directed by the regulator, he stressed,” the source said.

A CBN official, who spoke in confidence, said the resolve of the apex bank to adopt “the publish and shame” strategy was as a result of the failure of persuasion which many of the banks have adopted over the years. He warned that this would be the beginning of a long-battle aimed at recovering all outstanding loans due the lenders.

Some of the facilities in the bank books are classified as overdrafts, project financing, term loans and others which are said to be unauthorized credit advances. The NPLs range from one to over five years in many instances.

However, there are strong indications that much pressure is being mounted by some prominent debtors against the publication of the debtors’ list. The Nation learnt that about two to three banks have withdrawn the list they sent to some media houses for publication, saying they required more time to clean them up.

A banker, who craved anonymity, said he was concerned that the strategy that these debtors applied in the past to evade settlement of their debts might come to play again. He said many of the debtors were strong enough to offset their indebtedness, but regretted that lack of determination to apply the rules always favoured them.

A Lagos lawyer, Chief Ajibola Aribisala (SAN), told The Nation earlier that it would be an uphill task to get the true debtors’ list published, pointing out that even if a list is published, it would never be the authentic one.

Chronic Debtors Owe Skye, Diamond, Sterling, Fidelity Banks N70.51bn

The PUNCH reports some Deposit Money Banks on Monday (today) commenced the publication of the names of their delinquent debtors, with 269 companies and a few individuals owing four of the banks N70.51bn.

Our correspondent gathered that the 269 firms and the few individuals, who owed Skye Bank Plc, Diamond Bank Plc, Sterling Bank Plc and Fidelity Bank Plc, had failed to service their loans for at least 365 days, thus forcing the banks to categorise them as non-performing loans.

Although the list includes firms with non-performing loans of 10 years and above, over 70 per cent of the debtors took the loans in the last three to four years.

More banks, it was learnt on Sunday, would publish the names of their debtors with non-performing loans during the week.

Going by the Central Bank of Nigeria’s directive, all the 19 banks as well as discount houses in the country are expected to publish the names of their delinquent debtors by August ending.

The publication of the debtors’ names follows the expiration of the July 31, 2015 deadline set by the CBN for the banks and discount houses to publish the names of debtor-companies, their subsidiaries and directors in national newspapers.

The central bank had on April 22 directed the financial institutions to commence the publication from August 1.

Banks and discount houses 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.

While Skye Bank and Fidelity Bank had published their debtors’ lists on Monday (today), Sterling Bank and Diamond Bank were forced to withdraw their lists at the last minute on Sunday for further reviews after some of the debtors made efforts to renegotiate their loans at the weekend.

Fidelity Bank, which has about N6.66bn as the total published NPL figure, has a telecoms company, Starcomms, topping its list of delinquent debtors with approximately N3bn debt.

Other companies on the list are mostly energy, oil and gas companies. The total number of debtors on the list is 28.

Skye Bank, which had about N13.3bn in the NPLs, published 107 names of debtor companies and individuals.

Sterling Bank is owed about N3.37bn by workers’ unions, consultancy firms and other companies. The number of its delinquent debtors is 61.

Diamond Bank has about N47.17bn as the total NPL figure, with oil and gas companies, construction firms, state government investment companies and a state House of Assembly topping the list. The delinquent debtors’ list comprises 173 names.

The big names of popular Nigerians that characterised the 2009 list are so far absent on the current list. This is because the Asset Management Corporation of Nigeria has bought the debts.

However, AMCON has said it will publish the names of its debtors in line with the current CBN directive.

The PUNCH had reported on Sunday that over 19 banks and discount houses operating in the country would publish the names of more than 1,600 debtors this week or before the end of August deadline given by the CBN.

Officials of financial institutions had confirmed to our correspondents on Saturday that they would publish the names of the debtors this week in compliance with the CBN directive.

Also on Saturday, the CBN ruled out the possible extension of the deadline on its directive to the banks to publish the names of their debtors.

The Director, Corporate Communications Department, CBN, Mr. Ibrahim Mu’azu, said there was no extension to the deadline.

As of the weekend, the debtors were said to be rushing to banks to renegotiate their loans.

The Director, Banking Supervision, CBN, Mrs. ‘Tokunbo Martins, had said, in a circular dated April 22, 2015, “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 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 currency, 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.

It said this reflected high credit concentrations as well as emerging risks, particularly in the oil and gas, and power sectors, adding that banks were likely to report weaker profitability, asset quality and capital ratios.

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 by to acquire the NPLs from the banking sector.