Unity Bank Comes Under Attacks, Indicted Of Security Fraud, Shady Transactions, Other Irregularities

Incorporated as a public limited liability company on January 2006, following the merger of nine Banks with competences in investment, corporate and retail banking. Unity Bank is one of Nigeria’s leading retail with 213 business offices spread across the 36 States and Federal Capital Territory.

Unity Bank has a unique history of being the first and only Nigerian Bank to have emanated out of the Largest Merger and Consolidation in the History of the Nigerian Banking Industry with the merger of nine (9) financial institutions namely; Intercity Bank Plc, First Interstate Bank Plc, Tropical Commercial Bank Plc, Pacific Bank Limited, Centre Point Bank Plc, Societe Bancaire Limited, NNB International Bank Plc, Bank of the North Ltd and New Africa Bank Plc.

In 2021 Embattled Unity Bank is currently battled a scandal involving alleged diversion of funds belonging to members of the Ogun State chapter of the Association of Senior Civil Servants of Nigeria.

The civil servants shut down the daily activities of the Ita Eko branch of the bank, over the alleged diversion of N134 million investment fund.

The civil servants were armed with placards bearing different inscriptions such as; “Ole Ni Unity Bank,” “Funds Not Safe In Unity Bank,” “Unity Bank Stole Our Money”, “No Refund, No Retreat, No Surrender,” others.

Trouble started when the association decided to move its investment fund from the bank to another commercial bank where they got a “better deal.”

The civil servants marched to the Ita-eko branch of the bank in Abeokuta, singing solidarity songs.

A copy of an agreement, dated August 13 and jointly signed by the Chairman of the Association of Senior Civil Servant of Nigeria (ASCSN), Savings Scheme, Makinde Bamidele, the Treasurer, Suliaman Ayodele Jamiu, the South-west Regional Manager of Unity Bank, Olanrewaju Olusegun, and Abeokuta branch Manager of the bank, Saka Adeleke, on the loss of fund belonging to the Association was obtained.

But an official, who preferred not to be named because he was not authorised to speak for the bank, said the Central Bank of Nigeria has waded into the matter.

In November, 2020 a customer of Unity Bank Plc, Innocent Okafor and his company Lexin Agric&Cycles Limited have renewed their legal battle against the bank over excessive and illegal bank charges.

The plaintiffs are claiming the sum of N70 million being special damages arising from excessive, wrongful charges and loss of business profit.

In an amended statement of claim filed before a Federal High Court, sitting in Lagos, Southwest Nigeria, the plaintiffs alleged that Lexin Agric &Cycles company started banking with bank of the North Limited which was later acquired or taken over by Unity Bank Plc,

The statement claimed that on 12th of July, 2001 the bank offered the company the sum of N15 million as both import finance and overdraft to finance the importation of bicycles and its spare parts.

It said the tenor of the loan was subsequently extended to December 2002 and later enhanced to N25 million under the same terms and conditions.

The statement stated that when the company evinced an intention to utilize the facility, the bank insisted that it must first provide 30% of the total sum, which it did.

It added that Innocent Okafor gave the original copy of the deed of Assignment of his property known as 42 Ajoke Salako Street, Ifako Bariga to the bank dated 4th January, 2000, however none of the plaintiffs executed any legal mortgage in respect of the property in favour of the bank or any other party in connection with the loan.

The plaintiffs alleged further that the company has repaid the bank all the money that it owed, but that the bank refused to release or return to the plaintiffs the deed of Assignment of his property despite the plaintiffs’ repeated demands for same, as the bank threatens to sell the property.

The plaintiffs alleged further that Unity Bank imposed all types of illegal charges, interest and commissions on the company’s account.

The company contended that it was not at any material time indebted to the bank and was not owing any money to the bank.

The company instructed a consulting firm to audit or reconcile its account from January 2000 to July 2008. The audited account and report showed that the company paid the bank the sum of N35,689,041.74 in excess as a result of excessive/wrongful charges,irregular debit and so on.

The consulting firm sent the reconciliation report to the bank as well as request to refund the sum of N35,689,041.74. till date the bank refused to pay the company the said sum.

By the relevant provisions of the Central Bank Monetary, Credit, Foreign Guidelines applicable at the material time-2000-2008 , under payment or excessive charges shall be refunded within two weeks of the discovery of the customer’s complaint with interest at the bank’s maximum leading rate, on the date of refund along with a letter of apology to the customer; and any bank that fails to comply with this provision shall, in addition to the refund to the customer be liable to a penalty amounting to 100% of the amount involved.

As Unity Bank Plc liquidity crisis gets messier, the bank’s managing director and chief executive officer, Ms. Oluwatomi Somefun, is said to be fighting hard to save her job even as the lender plans to hold its annual general meeting (AGM) on the 1st of July 2021.

Inside sources disclosed that bank’s board led by Aminu Babangida, (son of Ibrahim Babangida) has lost confidence in the leadership of Somefun as she has failed to turn around the fortunes of the bank. This medium also gathered that the lender’s shareholders have also questioned the capacity of Somefun and thereby called for her sack. A close look at the books of Unity Bank shows that the lender is in dire need of urgent capitalisation if it must eventually survive the CBN hammer. Even the bank’s external auditor, KPMG Professional Services, raised a red flag in 2019 and 2020 on the existence of Unity Bank, when it pointed out that the bank’s total liabilities exceeded its total assets by N279 billion and that the lender did not meet the required minimum CAR of 10 per cent for a national bank. Agusto & Co. had also assigned a “BB-” rating to the bank, meaning that it is junk, which is below investment grade. KPMG had warned that “a material uncertainty exists that may cast significant doubt about the bank’s ability to continue as a going concern.” However, the board has expressed strong confidence that it would salvage the situation and get the financial institution back on its feet. In the 2020 reporting year, the auditor again warned about this persistent matter and in the results, it was noted that in the year, Unity Bank only managed a pre-tax of N2.1 billion, lower than N3.4 billion in 2019 and its total liabilities exceeded its total assets by N275 billion versus N279 billion in 2019, with CAR of -101.29 per cent as against -200.8 per cent in 2019). “The bank, therefore, did not meet the minimum capital requirement and the CAR as stipulated by the CBN for a bank with a national banking license which is 10 per cent. “The directors acknowledge that uncertainty remains over the timing of the recapitalisation of the bank. “However, the directors [have] reached an advanced stage with both local and multinational investors in the fund mobilisation for the bank,” the results said. In the last five years, the performance trend of the financial institution has hardly tickled investors and there have been patches of weaknesses here and there, indicating that all is not well with the bank. For instance, its profit before tax slumped 82 per cent from N13.639 billion in 2014 to N2.342 billion in 2015. It also dropped by 22 per cent from N2.342 billion in 2015 to N1.816 billion in 2016. In 2017, the bank had a loss before tax of N14.243 billion compared with the pre-tax profit of N1.816 billion in 2016 and in 2018, in its restated results, the bank recorded a loss before tax of N7.554 billion, but in 2019, it was a pre-tax profit of N3.642 billion and in 2020, it slumped to N2.223 billion.

Recently Unity Bank sacked over 215 workers on its payroll, the dismissed workers were those who “achieved less than 40 per cent of their performance target, which affected the lender’s overall profitability in recent years.

It was also reported that Unity Bank asked the affected workers to go due part of its reengineering strategy for greater performance.

The development comes on the first day at worker from the two-day public holidays declared by the Federal Government to mark Eid el-Kabir. The workers sacked by the bank were reportedly shocked to be welcomed back with their dismissal letter.

The sack of the 215 staff is also coming when most banks in Nigeria are battling with poor profitability due to harsh economic conditions and heightened business risks from the plunge in crude oil prices.

Also, commercial banks have found it hard to survive due to the introduction of the Treasury Single Account (TSA) implemented by the present administration, which requires them to transfer funds belonging to the government to an account domiciled with the Central Bank of Nigeria (CBN).

It was reported that workers fired by Unity Bank cut across all cadres including junior, middle and top management positions.

“About 200 new hires were said to have been recruited by the Bank to drive the transformation initiative began by the Management in the last one year while about 100 other staff were said to have been promoted recently,” Vanguard quoted a source in its report on the development.

In May the same year, Unity Bank forged a strategic alliance with Black Trituium, equity and investment fund manager and the new investor has injected fresh ideas into the bank.

This has expanded the scope of the financial institution; strengthening its capital base and making it support massive retail banking.

In 2015 Six employees of Unity Bank were on Wednesday charged before a Wuse Zone 2 Senior Magistrates’ Court, Abuja over alleged N306 million fraud.

They are facing charges of criminal conspiracy, forgery, theft and negligent conduct.

The News Agency of Nigeria reports that of the 26 involved in the crime, only six were arraigned on Wednesday.

They are: Chinoso Akamerre of Fegge Onitsha branch; Esther Olubade,  Mayowa Oyinloye, Sanusi Olarenwaju, Abubakar Barau and Biodun Daodu, all of Gwagwalada branch.

The prosecutor, Corporal Francis Tanko, told the court that on January 29, 2014, the bank’s Managing Director, Henry James, reported the case to the Inspector-General of Police.

Tanko said between January 24 and 27, 2014, the accused persons conspired with the Fund Transfer Control Unit officers to commit the offences.

Tanko named the officers as Rabi Ibrahim, Esther Olubade and IT operators of the bank – Mayowa Oyinloye, Sanusi Olarenwaju, Abubakar Barau and Biodun Daodu.

The prosecutor said the officers connived to forge some documents.

He alleged that they stole the money through electronic transfer from three accounts.

Tanko told the court that the accounts of the Pilgrims Welfare Board, University of Abuja and Greenfields Limited were used.

The prosecutor said the money was transferred to 18 different accounts of the accused, domiciled at eight different banks without the consent of the account holders.

The offences, he said, contravened Sections 95, 196, 287 and 364 of the Penal Code.