Posted by From Kunle Aderinokun in Abuja on
The Nigeria Deposit Insur-ance Corporation (NDIC) yesterday disclosed that it realized a total of N4.02 billion as proceeds from the disposal of fixed assets of liquidated banks as at the end of July this year.
The Nigeria Deposit Insurance Corporation (NDIC) yesterday disclosed that it realized a total of N4.02 billion as proceeds from the disposal of fixed assets of liquidated banks as at the end of July this year.
Also, the Corporation said it declared an aggregate dividend of N10.9 billion out of which N5.87 billion was paid to uninsured depositors.
Making these disclosures yesterday in Abuja at a press briefing to mark the first Deposit Protection Awareness Week, Managing Director, NDIC, Mr. Ganiyu Ogunleye, said the assets sold included immovable and not easily movable ones such as plants and machinery. He said healthy banks were encouraged to buy the closed banks' purpose-built offices and branches with all their contents.
The assets, according to him, were valued by independent professional valuers to determine fair market value which formed the basis for determining the sale price. He added that disposal of physical assets were made through public tender by sealed bids and sometimes open auction.
Ogunleye said that the NDIC had after closing the banks, rented warehouses where their physical assets were kept on bank by bank basis, noting that some of the assets were sold at locations.
He said as at the end of July, apart from the N10.9 billion liquidation dividend declared, a final dividend of 100 per cent of total deposits had been declared for 10 banks. This, according to him, showed that 'all the depositors of those banks would fully recover their deposits. The affected banks, he said, were ABC Merchant Bank Limited; Alpha Merchant Bank Plc; Amicable Bank of Nigeria Limited; Continental Merchant Bank Plc; ICON Ltd (Merchant Bankers); Kapital Merchant Bank Ltd; Nigeria Merchant Bank Ltd; Pan African Bank Ltd; Premier Commercial Bank Ltd; and Rims Merchant Bank Ltd.
He said liquidation dividend has also been paid to some general creditors of some of the banks. 'For example, the general creditors of Pan African Bank (in-liquidation) had been paid a total of about N167.25 million. The amount represented about 67 per cent of the total amount of about N254 million declared as liquidation dividend to the creditors of the bank. Similarly, the general creditors of Rims Merchant Bank (in-liquidation) had been paid the sum of N139.77 million representing about 83 per cent of the total amount of about N168.1 million declared as at the end of June 2003. Likewise, Amicable Bank declared 100 per cent dividend to its preferred creditors and 10 per cent to other creditors," he said.
The NDIC chief executive said the shareholders of Nigeria Merchant Bank Ltd namely United Bank for Africa Plc and Ministry of Finance Incorporated (MOFI) were paid liquidation dividends amounting to N620 million according to their ownership ratio of 60 to 40. He added that a total of N293 million was paid as liquidation dividends to Rivers and Bayelsa state governments which were former owners of Pan African Bank Ltd while the payment to shareholders of Alpha Merchant Bank (in-liquidation) was still on-going.
On debt recovery, Ogunleye said a total of N5.47 billion had been recovered from the debtors of closed banks. In addition, he said 12 Nigeria Export Import Bank (NEXIM) projects amounting to N81.4 million and 43 National Economic Reconstruction Fund (NERFUND) projects amounting to N124.3 million were returned to NERFUND in appreciation of the vital role of the real sector in the economic development.
He said the Corporation had adopted strategies, which assisted it in the debt recovery. According to him, 'in order to encourage debtors of failed banks to repay their debts, balances as the date the banks were closed were frozen. All the interests accrued after liquidation were reversed while several requests for interest waivers were favorably considered." For instance, he said 'in 2000, post liquidation interest amounting to N5.16 billion were written off which made aggregate loan balances to reduce from N35.37 billion to about N30.21 billion."
Also, Ogunleye said the NDIC had been supporting the Federal Inland Revenue Service (FIRS) technically to investigate cases of conversion/diversion of tax revenues. He said 'the investigation conducted by the corporation in July 2002 revealed that the FIRS cheques valued at N908,991,422 value added tax (VAT) and withholding tax were fraudulently cleared diverted or converted by some banks." The revelation, he noted, helped the FIRS in the recovery of over N700 million of the fraudulently diverted fund in 2003.
However, Ogunleye said the NDIC had proposed in its amendment bill with National Assembly premium rate of 50 per cent basis point below what is being paid by the universal banks for community banks (CBs). He added that the corporation had also proposed a Maximum Deposit Insur-ance Coverage (MD-IC) of N100,000 for the CBs and primary mortgage institutions (PMIs).