TICKER: I am leaving a Union Bank that is “swimming in money” – Funke Osibodu

Last week, Mrs Funke Osibodu who was drafted by the CBN Governor, Sanusi Lamido Sanusi, in August 2009 to rescue Union Bank completed her assignment. She had a valedictory interactive session with the media where she outlined the spirited efforts put up by her team of rescuers to bring the bank back to life. Today she said the bank is not just big, strong, but more reliable than before.

Excerpts

You said you are going on leave and after a while, you will return to Union Bank. Please can you be explicit and give us details on why you are coming back?

I didn’t say after a while I would be returning to Union Bank. I said I would be leaving to proceed on leave and I have my accumulated leave till end of December. So, technically, I am still a staff of Union Bank till the end of December. I was only talking about the transition with the new Chief Executive Officer that we have been working silently together and he would take over officially on Thursday. When I leave, if there are things that are unfinished, I would come in and sort them out. So, I am not returning to Union Bank, I will just be performing my duty as a staff of Union Bank till the end of December.

As the last person standing, what have been your experiences so far in trying to bring back Union Bank?

Union Bank is the last man standing, not me. Union Bank has been a very interesting institution to work for and it is an institution with a very rich heritage in terms of relationships and people. I believe I have stayed this long because it is a huge institution and achieving the goal which was set when the governor asked us to come was basically to stabilise the institution.

I have played my part in moving it to a greater height. In fact, I give kudos to the outgoing board because from day one, they came to a decision that Union Bank will stand on its two feet again and we would do our best to see to it. So, from that perspective, we looked for investors that would ensure our going forward and that some of those things that happened in the past would not surface again.

As you all know, we now have core investors called Union Global Partners Limited and what is unique about them is that they are foreign investors who brought very strong corporate governance and international exposure to the bank. As some of  you know, externally, they have been making their own press announcement that they have invested in Union Bank.

So, when you bring foreigners into this kind of environment, their time frame is not necessarily as fast. And secondly, the methodology we use is different from others such that it required careful process of regulatory approval.

*Mrs Funke Osibodu
Why was there delay in recapitalising the bank?

While we wanted it faster, we couldn’t get it faster but we are close. Again, to ensure that there is smooth transition, I had to stay and be part of the new board which started in February and see that there is a new executive so that when I leave, someone will still be around.

As you know, three out of four former executives – Ibrahim, Kunle and Phillip – are part of the process to see that the transition is successful. Two new executives will join us; one of them would not be joining us until sometime next year which will make it a complete team plus the new chief executive. So, it was planned so that the change in mantle will be smooth.

On my own side, what have kept me going are different things. Some are positive and some not very positive. When I read the newspapers, the negative speculations give me the energy to say ‘I would stay and prove them otherwise. The positive ones when we were celebrated for what we have done so far and from the people themselves.’

If you could remember, at some point when we needed shareholders to agree to our scheme document, we needed staff and shareholders to work together, that was one point where I saw the real strength of Union Bank. Our staff, pensioners and shareholders all worked together to see that Union Bank retained that last man standing. So, as the last man standing, generally, it has been so many things in bits and pieces that have ensured that we are successful.

What was wrong when you took over and how are the performance indicators now that you are leaving

When I came in, there were three things that were wrong. These were corporate governance, negative capital and liquidity crises. Within the first three months, we got over our liquidity situation. On our liquidity ratio that was negative, I am leaving the bank with liquidity ratio of over 80 per cent; it is around 90 per cent positive.

The statutory minimum requirement of liquidity, ratio-wise, is 25 per cent. We are leaving the bank above the statutory minimum. In other words, we are now swimming in money and immediate portion of it came from the new capital that came in and the loans we sold to AMCON.

When it comes to negative capital, I think at our peak level, our shareholders’ fund was negative, somewhere around 300 or 400, that is about N378 billion negative. At that point, even the shareholders had technically lost all their money.

Today, we have positive capital of N190 billion. So, we have moved from negative of N378 billion to N190 billion positive. That is over N570 billion positive to change that. That is something that took quite a lot of work by all of us.

On the corporate governance side, you remember the corporate governance issues were that everybody was doing his own thing and there were so many things we had done wrong. I think the example I can use is that now we are 95. At that time, we were 92 or 93 years old.

When you go to an old woman’s house, you are bound to find a lot of cobwebs because she will not throw so many things away easily. It is when the children come and say ‘Grandma, why are you still keeping this?’ And she will say ‘leave it there,’ and they will forcefully take it and throw it away. Our own job was to go and clean out several of those cobwebs. I believe we have done a reasonable job. There are many things we have cleared up. Remember, I used to say we have un-reconciled accounts of over N3 trillion.

what is the size of accounts you have reconciled so far?

Today, our un-reconciled accounts are in the hundreds of millions and not billions any more. We have an army of over 150 people that work day and night cleaning it up. So, that is part of the cobwebs we were cleaning up. We had bad loans which we sold to AMCON; we wrote off some, we negotiated some and we now have a unit called Portfolio Management.

Their job is to manage those bad loans and resolve them. It means that our loan portfolio reduced from over N700 billion to around N200 billion now. All the things clustering us have gone. It is now for us to build on it. Some people used to say that Union Bank is for old people.

A young man would say that is the bank of my father or my grandfather. ‘They took me there those days.’ We have good news for you; we have an army of at least 1,000 young people recruited within the last three years. So, we have new blood that has taken over Union Bank.

What will you say about the Union Bank you are leaving behind?

The way we have described the new Union Bank is that there are two of us necessary for the future of Union Bank – the older people like us with experience and the younger people who we call energy – So, imagine the new Union Bank with energy and experience. While the experience tells you what to do, the energy works on it very fast.

So, several things have changed. You will see it in our customer care. I have seen several customers expressing amazement after visiting our staff. When a customer comes in, we try our best to be fast in attending to him. You have seen some of our branches; some of them are very run down, but we have a new face of the branches. We have launched at least 75 out of over 300 branches. These changes are what I call the foundation to move to the next stage.

– Vanguard

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