(L-R) Prof Yemi Olatunji-Bello, deputy vice chancellor, Lasu and Mr Stevens Evans, CEO, Etisalat Nigeria at the Etisalat Scholarship Award ceremony to university students in Lagos.

THE revelation in the just released 2009 financial report of Union Bank of Nigeria Plc that about N250 billion of its revenue has been used as provision for some perceived short falls may trigger some discontent at the bank’s annual general meeting in Maiduguri next week.
BusinessWorld Financial Intelligence can now reveal that the provisioning which has been largely seen as a ploy by the management of the bank to further erode the income of the bank is aimed at reducing the value of the bank thereby guaranteeing the effort to sell it at a give-away price to some preferred bidder. The meeting which comes up on December 16 may be the last point where the fate of the bank and its shareholders will be finally settled.
There are strong indications that the shareholders of the bank are high on plans to protest this provision as it was against the advice given to the bank by the audit committee of the bank which made inputs in the provisioning needs of the bank before the balance sheet was finally ratified.
Investigations reveal that the bank has made a N80 billion provisions for staff pensions; it made another provision of N111 billion for its unbalanced books; there is another N11 billion profit which was not released earlier as profit accruing; there is another N40 billion which was classified as asset-backed lending. There are indications that some of the provisions could be made in phases while some are uncalled for because of the long-term contents of the facilities, as others are equally quite unnecessary at this stage.
There is the belief that if a good part of the provisioning is phased with some levels of refinancing done, the bank will recover faster and win the confidence of the market. Investigations reveal that this situation will further create the impression that the bank is in a bad state; which will be a justification for its outright disposal.
In reviewing the bank’s financials prior to the submission of its financial report, the audit committee had last October noted in its final meeting to the bank that since the workers union are laying claims to N20 billion out of the N80 billion proposed for provisioning, management should ensure that N60 billion was written back into the books of the bank. But the committee’s recommendation was ignored as the entire N80 million was finally written back.
The audit committee made up of shareholders and some prominent board members are believed to be worried as their positions regarding financial matters in the bank have been sidelined even as they have been trying to assist the bank.
Further investigations reveal that this development may affect the AGM as possibilities of fierce legal battles and workers restiveness may become the tools in an effort to readdress  the issues in contention.
This becomes more serious considering that if the AGM holds and all the resolutions are passed, the shareholders of the bank may not have any other opportunity of reversing any decision that they feel strongly opposed to.