Unity Bank to sign MoU with Asian infrastructure finance institution for capital
Unity Bank plc has disclosed plans to sign a memorandum of understanding (MoU) with Asian second largest infrastructure finance institution and other parties for capital.
One of Nigeria’s tier two banks could not disclose the amount to be invested and the time of signing the agreement.
“We are talking to different partners, we are still in discussions, we are rounding up. We are concluding an MoU with some parties that will narrow it down and they are credible, serious parties. We have done all the due diligence, we are just now at finalizing that engagement”, Tomi Somefun, managing director/CEO, told newsmen in Lagos.
Improving on its information technology, the bank plans to do more work in terms of expanding its customer service, customer acquisition, as well to expand its platform among others.
She said the Bank sold off the remainder of its loan books that were bad to a private company. Before the sale of the Non-Performing Loans (NPLs), the business of the bank almost became debt recovery.
“The bank was not set up for debt recovery but to do banking. We found that we were spending much time on debt recovery, chasing debt and legal cases. I am sure that Unity Bank has a fair share of cases in court on loan. We were bugged down and we decided to give it to experts”, Somefun said.
N6 billion out of the N436 billion bad loans was initial consideration and the private sector recovery company is expected to recover the loans and whatever they realize, they will share with the bank, while the bank will concentrate on its strategies of growing the institution.
The bank also wrote-off goodwill worth N16 billion accruing from legacy mergers, which consequently put it in negative N14 billion loss.
Explaining the recent action by the Nigeria Stock Exchange (NSE), she said, “We wanted to put that loss and of course resultant negative capital in perspective. We were waiting to conclude the MoU and make the announcement. So we were delaying, taking our time, because of the NPL sale, the CBN wanted to get sure of those account so it took a while before our account was approved by the CBN. We finally got the approval in August. Unfortunately, the NSE decided to take that action despite the engagements and explanations. However, immediately we complied we were reinstated”.
She said the bank is doing a lot in the agricultural space, partnering with the CBN on anchor borrowers programme.
The bank plans to focus more on the next generation of customers, mostly the young people, designing products targeted at the youth.
She was concerned that the bank spending a lot of money paying customers complaints which she said about 90 percent of such complaints were as a result of legacy mergers.
Hope Moses-Ashike