Abasifreke Effiong
Akwa Savings and Loans Limited will soon move out of insolvency. Independent investigation
reveals that the bank needs N2.7 billion for its on-going
recapitalisation. The State government has expressed strong willing to
provide the recapitalisation fund.
The Akwa Ibom State owned mortgage bank has already been restructured ahead of the recapitalization. Recapitalization means giving new money to the bank under new management rules with the purpose of building up asset.
Akwa Savings and Loans was incorporated on January 25, 1993 as Akwa Mortgage Finance Limited (RC 213814) with fully paid-up share capital of N20 Million.
The name of the bank was changed to Akwa Savings and Loans Limited and reincorporated in 1995 in accordance with Mortgage institution Decree 53 of 1989. It was licensed to carry on mortgage banking business.
The bank became distressed and eventually liquidated under the last administration. Government interference and the bank's management's deviation from its core mandate- mortgage banking- to commercial banking made the bank broke. The bank lost its initial capital and deposit holders' funds to lending and investment in toxic assets.
The case was so bad that depositors couldn't withdraw their money, owners of current could not withdraw their salaries, staffers of the bank were owed arrears of emoluments.
All the old staff of the bank, about 35, have resigned. It is not clear whether the turnover was voluntary; but they've been paid-off by new the new management of the bank.
Their pay-offs were not commensurate with the number of years, some about 20 years, they worked in the bank, chairman of the Trade Union Congress, Akamba Awah said at the 2017 workers day celebration.
"Some of them were not employed on merit, they were employed based on 'man-know-man'", a staff of the bank alleged.
Investigations reveal that outstanding credit owed the bank is a little above N1.7billion.
The new management is working to recover the loans. It might be difficult to recover all the facilities. Sources in the company who didn't want to be named said due process was not followed in processing some of the facility. Most of those owing the bank are politicians, and allies of the former governor, Senator Godswill Akpabio.
The bank is in court with some of the creditors. Some creditors of the bank are facing cases with the EFCC. The new management looks serious about recovering the debts; but going all the stretch with the debtors will require independence. The bank's board of directors and management must not be teleguided by government.
However, in all of this, the cherry news is that core to the new management's vision on recapitalization is taking the bank back to her principle mandate - providing affordable houses to people of the State.
Akwa Savings and Loans Limited is juggling back to life to meet her commitment to her old shareholders and live the mandate for which it was established to serve.
Soon, it will commence a-500 unit of low and high density housing for civil servants in the State.
Governor Udom Emmanuel had during the 2017 workers day celebration announced government's plan to provide "extremely affordable houses for civil servants".
This project will be a litmus test for the new board and management of the bank.
Already, the bank has acquired 50 hectare of land in Nsit Ibom local government area for the housing project. The plot laying along Aka Etinan-Mbiokporo Nsit road near Jehovah's witnesses' camp ground has had all paper works completed.
A layout of the housing which will kick-off within this second quarter of 2017, has been completed. Recently, the commissioner for works, Mr. Ephraim Inyangeyen was there to inspect the site.
Twenty-six (26) hectare of the acquired land is earmarked for about 250 high density housing for low income earners. Twenty-four (24) hectare will be used for low density houses, according to a source who has access to the project.
However, what is not clear yet is, will the bank retain all her original shareholders after the recapitalization?.
There is a concern on why the government hasn't sought large-scale investor to make a big one-off investment in the bank?.
The government is having difficulties funding some projects because of the fall in revenue projections. It is relying on two models, Alternative Project Funding Approach (APFA) and Foreign Direct Investment (FDI).
What indicators are there that shows that government will recoup her investment in the bank after the recapitalization?. These are the posers seeking answers from the bank's new management team led by Mr. Ebong Bassey.
Recapitalization has worked for other banks. It will work for Akwa Savings and Loans Limited provided the board and management of the institution are allowed independence to take business decision on how to hit high profitability ratio on earnings on assets and equity.
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