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NDIC recovers N24.68bn from debtors of failed banks

By on September 14, 2013

The Nigeria Deposit Insurance Corporation said it recovered  in 2012 a cumulative sum of N24.68bn from debtors of Deposit Money Banks that were liquidated by the Central Bank of Nigeria.

The N24.68bn represents an increase of N2.42bn over the N22.26bn recovered in 2011.

It also said that a cumulative debt sum of N42.90m was recovered from the debtors of closed microfinance banks in 2012 as against N13.48m realised in 2011.

The corporation gave the figures in its annual report and statement of account for the 2012 financial period, which was released in Abuja on Thursday.

The report was jointly signed by the Chairman of the NDIC Board, Dr. Hassan Adamu, and the corporation’s Managing Director, Mr. Umaru Ibrahim.

It stated, “The NDIC continued to play its role as the liquidator of closed DMBs through the payment of liquidation dividends to un-insured depositors and other eligible claimants during the year under review.

“In its debt recovery efforts, the NDIC had recovered a cumulative sum of N24.68bn from debtors of the DMBs in liquidation as of the end of 2012 as against N22.26bn recovered in 2011.

“Similarly, a total cumulative debt sum of N42.90m was realised from debtors of closed MFBs in 2012 as against N13.48m realised in 2011, representing an increase of N29.42m or 218 per cent.”

According to the report, the total number of banks whose licences had been revoked by the Central Bank of Nigeria since 1994 stood at 48.

Out of this figure, the NDIC report stated that winding up orders for 45 had been obtained from the courts.

The revocation of the remaining three banks, according to the report, is still being challenged in court by their shareholders.

The banks currently under litigation are Fortune International Bank Plc, Triumph Bank Limited and Peak Merchant Bank Limited.

The report stated, “The decision of the corporation to pay the insured amount to the depositors of Fortune International Bank Plc and Triumph Bank Limited from August 2011 continued to subsist throughout 2012, utilising Access Bank as the agent.

“The judgement order affirming the revocation of the banking licence of Fortune International Bank was given in the last quarter of 2012, but the bank further appealed the judgement.

“Meanwhile, the litigation in respect of the revocation of the banking licence of Peak Merchant Bank Limited, whose case was reviewed in 2003, had yet to be resolved in 2012.”

In order to enhance the pace of debt recovery and payment of uninsured deposits, the NDIC said it would continue to use the services of debt recovery agents.

It also said that 11 accounts of large debts of the closed banks with total book value of N3.85bn were packaged and sold to the Asset Management Corporation of Nigeria in 2012.

AMCON, the report noted, offered to purchase the debts at a total value of N795.38m, which was accepted by the corporation.

On the three banks acquired by AMCON, the report said the NDIC, in collaboration with the CBN, was closely monitoring their financial condition through the Special Monthly Status Reports from the affected banks.

In the area of liquidation dividend, it also said a cumulative amount of N73.58bn was paid to 250,209 un-insured depositors of closed DMBs in 2012 as against N73.55bn paid to 250,119 depositors in 2011.