Four banks hold 34% of industry’s toxic assets

bank-greeneuropeanjournalThe “name and shame” exercise has revealed more about the depth of toxic assets in four of the worst hit banks so far published – Union, Diamond, Unity and First banks.

More so, 34 customers from the four banks are cumulatively indebted to the tune of ₦104.4 billion, which represents 19.1 per cent of the total industry bad debt portfolio. The customers, picked according to their debt obligations in each bank, comprise six from Union Bank, 10 from Diamond Bank, eight from Unity Bank and 10 from First Bank.

In Union Bank, while the total bad debt stands at over ₦50 billion (9.2 per cent of the industry’s bad debt), an analysis of the debt list shows that six customers owe ₦28.1 billion (56 per cent of its total toxic assets and five per cent of the industry’s total bad debts).

Of the six customers, three worse debtors are playing in the nation’s oil and gas and power sectors, while the other three are involved in construction and aluminium businesses. The second most owed bank is Diamond, which bad book is ₦47.17 billion (8.6 per cent of the industry’s total).

However, further analysis of the lender’s debt list shows that ₦18.3 billion (38.8 per cent of its total bad book and 3.4 per cent of industry’s record) is with its top 10 debtors. Leading the pack with ₦5.8 billion is Ibom Power Company Limited, under the Akwa Ibom Government and Industrial Promotion Council, which loan terms have expired since May 2010.

Other debtors include Saidon Africa Limited (₦2.4 billion), Louis Carter Industries Limited (₦2.2 billion), PICRIC Nigeria Limited (₦1.6 billion) and EPIC Investments Trust Company (₦1.5 billion), among others. The third most owed bank now is Unity Bank Plc, which bad loan book is put at ₦45.52 billion (8.3 per cent of industry’s total bad debt portfolio).

Also, eight top debtors accumulated ₦26.9 billion (five per cent of the industry’s total toxic assets and 45 per cent of the bank’s bad debt stock).

Ava Cement Limited is owing the bank ₦9.9 billion (21.7 per cent), LOH and OR Construction Nigeria Limited, ₦6.5 billion, Deanshanger Project Limited, ₦3.7 billion, Fargo Petroleum and Gas Limited, ₦2.5 billion, and Adem Industrial and Comm. Company Limited, ₦1.2 billion.

First Bank followed the pack with ₦43.72 billion (eight per cent of the sector’s bad debt portfolio). According to its debt list published in The Guardian, 10 of its worst debtors accounted for ₦31.1 billion (71 per cent of its bad book and six per cent of the sector’s bad debt portfolio), Shield Petroleum Limited owes ₦6.9 billion, Ajaokuta Steel Company (₦6.1 billion), Starcomms (₦5.5 billion), C&M Limited (₦2.3 billion) and Sirius Energy Resources Limited (₦2.2 billion), among others.

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