₦649bn Bad Loans: Banks To Sell Over 1,000 Debtors’ Properties — Sunday PUNCH Investigation

Deposit Money Banks have put up for sale over 1,000 properties belonging to several customers, who were unable to service their loans, investigations by Sunday PUNCH have shown.

This came about eight months after the amount of bad loans in the banking industry rose sharply by 78.8 per cent to ₦649.63bn at the end of 2015.

Impeccable industry sources revealed that most of the 19 commercial banks in the country had engaged the services of estate surveyors, prominent realtors and lawyers to help them to sell the properties.

The move, according to the sources, was part of efforts by some banks to recover bad loans and shore up their capital base in the face of current economic crisis.

The properties had been used as collateral in obtaining loans by the banks’ customers.

Some of the realtors and lawyers, who spoke on condition of anonymity, confirmed that they had been contacted by the banks to market the properties.

According to documents obtained, the over 1,000 properties include, multimillion and multibillion-naira mansions, luxury hotels and petroleum tank farms, located in highbrow areas of Lagos, namely Ikoyi, Lekki, Ajah, Ikeja and Apapa.

They also include parcels of lands, detached houses, high rise commercial buildings, terrace houses and warehouses.

Other properties are scattered across the country in states like Enugu, Abia, Kano, Kaduna and Ogun.

Some of the banks include Guaranty Trust Bank Plc, Skye Bank Plc, First City Monument Bank Limited, Zenith Bank Plc, United Bank for Africa Plc, First Bank of Nigeria Limited, Stanbic IBTC and Fidelity Bank Plc.

While some of the properties are being offered for sale at their open market value, many others were offered at their forced sale value, which is the value the properties would sell for when a seller is under duress, and it is usually the two-third of the open market value.

In a bid to avoid litigation that could be instituted by some of the debtors, the banks, Sunday PUNCH learnt, had notified the owners before putting them up for sale, making many of the properties to be under consent sale.

One of our correspondents, who visited some of the properties, confirmed that the properties were up for sale while some were still being occupied by their owners.

A comprehensive document released by one of the banks, listed 97 properties, which included a building on one acre of land on a popular street off Adeola Odeku, Victoria Island, Lagos, offered for ₦2bn.

Another property is a block of flats comprising two and three bedrooms on 1,895square metres on Admiralty Way, Lekki Phase I, offered for ₦650m; and an industrial complex on 11,000sqm at Mobolaji Johnson Avenue, Oregun/Alausa offered for ₦4bn asking price.

The list include a tank farm comprising eight storage tanks for petrol totalling 50 million litres capacity and two tanks for kerosene on 11,830sqm offered for ₦15bn; six blocks of two and three-bedroomed luxury flats on 1,895sqm at a popular street off Admiralty Way, Lekki Phase I, offered for ₦700m; and plots of land with Certificate of Occupancy on 19,400sqm in Banana Island, Ikoyi, Lagos offered for ₦6.5bn.

Also, there is a luxury hotel on 3,286.161 square metres of land in Ikoyi, offered for ₦2.5bn; a purpose-built office complex on four floors, occupying 760sqm in Ikeja, offered for ₦250m; another luxury hotel comprising 84 rooms with a swimming pool, gym, elevator, hall and other top-notch facilities on 1,664.68sqm in Ikeja, offered for ₦1.6bn.

A tank farm with storage capacity of 21.5 million litres on 4,203.48sqm at Apapa Port, was offered for sale at ₦6bn.

Also, on the list are a filling station on one acre of land in Sango Ota, Ogun State, offered for N90m; a purpose-built property on three floors comprising of four numbers of two-bedroomed service flats, with a four-roomed service quarters, a gym and a swimming pool on 1,294 sqm in Osborne, Ikoyi, Lagos, offered for ₦700m.

There are blocks of office, warehouse and other ancillary blocks on 1623.36sqm in Apapa, Lagos, offered for ₦500m; a detached house on about 1,000sqm on Glover Road, Ikoyi, offered for ₦850m; and a guest house with 17 standard rooms on four floors in Lagos Island.

In another list, obtained from a source in one of the banks, there were about 39 properties, including a property on Ahmadu Bello Way, Kaduna and a building on 2,947sqm offered for ₦250m; a storeyed building on 833.4sqm in Kano State, offered for ₦150m; a bungalow with some stores on 500sqm in Aba, offered for ₦8m; and a plot of land in Enugu, with a Deed of Assignment, offered for ₦50m.

Two wings of five-bedroomed semi-detached houses with boys’ quarters and gate house, all sitting on 3,430sqm in Ikoyi, offered for ₦1bn and a purpose-built banking and commercial structure on 862.80sqm in Victoria Island, Lagos, offered for N450m were also in the list.

On another list from one of the banks, some of the properties up for sale include a 14-floor building in Victoria Island offered for ₦13bn; a three-bedroomed semi-detached house in an estate in Abuja, offered for ₦48m and four-bedroomed terrace mid unit in an estate off the Lekki-Epe Expressway, Lagos, offered for ₦27m.

The prices placed on the properties, according to the documents, are subject to negotiations, all in a bid to dispose of the properties.

At the 326th meeting of the Bankers’ Committee held recently in Lagos, the Director of Banking Supervision, Central Bank of Nigeria, Mrs. Tokunbo Martins, had shed light on the incidence of the non-performing loans in recent times.

Giving reasons for the NPLs, Martins attributed it to the economic downturn.

But the CBN spokesperson, Mr. Isaac Okoroafor, while commenting on the incidence of NPLs in banks, said loans were parts of business, adding that they should not be seen as a sign of weakness in the banking sector.

Commenting on the development, industry analyst and Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, attributed increased cases of NPLs to the current economic recession.

He said, “Increased level of loan default is one of the many negative fallouts of economic depression, which in some instances affect the health of banks.”

Spokespersons for UBA, GTBank and FCMB, could not be reached for comments but the spokesman for First Bank, Mr. Babatunde Lasaki, said the lender might not comment on the matter due to bank-customer confidentiality agreement.