By Peter OBIORA investadvocate

Jan 13 2011 01.39 GMT

Lagos (INVESTADVOCATE) – Union Bank of Nigeria Plc (UBN) confirmed that it received N239 billion Bonds from the Asset Management Corporation of Nigeria (AMCON).

Funke Osibudo, the Group Managing Director/Chief Executive Officer (GMD/CEO) of the Bank Thursday January 13 2011 confirmed this to Business Editors in a media parley held in Lagos Nigeria.

 

“The N239 billion we got is the first phase of the Asset Management Corporation’s intervention” she said.

 

Osibudo further confirmed that Union Bank would sit together with AMCON next week to reconcile the first phase of the Bonds and then deliberate on the way forward.

 

She said that it is not all the N239 billion that would affect the Bank’s capital; but out of the money, the Bank would have to reconcile the amount of toxic assets that were provided for in order to determine how that affected the Bank’s Capital.

 

The GMD/CEO of Union Bank affirmed that the Bank’s negative Capital is N254 billion and if the first phase of funds provided by AMCON reduces the negative capital by N100 billion, then the Bank would have N154 billion to cover; and this would be done by AMCON taking up equity stake in the Bank to that level.

 

“In this case, we would sit with AMCON, and agree on the terms of the equity and they provide the funds and technically emerge as shareholders of the Bank” she said.

 

Osibudo also said the existing shareholders in the Bank would be made to increase their stake through  new Right Issues, “we are targeting at N100 billion recapitalization” she said.

 

Earlier this week, Intercontinental Bank Plc affirmed it has received a big boost with the receipt of the N146 billion in AMCON Bonds in the first phase of the Assets Management Corporation’s intervention.

Intercontinental Bank said it expects additional Bonds from AMCON in the subsequent phases.

Union Bank and Intercontinental Bank were among the first five Banks whose CEOs and Executive Directors (EDs) where sacked by the Central Bank of Nigeria (CBN) August 14 2009.

Sanusi Lamido Sanusi, the Governor of the CBN had told Journalists that the removal of the Bank big wigs was due to excessively high level of non-performing loans, which was attributable to poor corporate governance practices, bad credit administration processes and the banks’ credit risk management practices.