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Resuscitating Akwa Savings And Loans Ltd

 

The story of Akwa Savings and Loans Limited is likened to a healthy child who after eating poisoned food, relapsed into coma and was taken to an intensive health care unit only to be revived by a team of competent[IU1]  medical personnel. The same scenario was applicable to the bank owned by Akwa Ibom State Government, whose sickness was caused by poor management and huge indebtedness by some of its customers. Yet, the State Government promptly intervened by setting up capable board of directors and management team that injected life dosages to the ailing financial institution, thus giving hope to customers who were daily frustrated in withdrawing their hard-earned money.

Akwa Savings and Loans Limited was incorporated on January 25, 1993 under the name Akwa Mortgage Finance Limited with fully paid up capital of N20 million. In 1995, the name was later changed to, and incorporated as, Akwa Savings and Loans Limited in accordance with Mortgage Institution Decree 53 of 1989 to carry out mortgage banking business. With branches and assets in Uyo, Eket, Ikot Ekpene and Oron, the financial institution has assets worth N4 billion. However, in 2015, the bank was on the brink of collapse. Moved by the ugly situation, the state Governor, Mr. Udom Emmanuel readily put in place new Board and management composed of tested hands in the banking industry to resuscitate the institution. At the moment, the bank is back to re-define and pursue its core mandate of efficient service delivery to restore public confidence in it. 

As part of an effort to rejuvenate the mortgage institution, Governor Udom Emmanuel set up a panel of enquiry to review the operations of the bank from January 2007 to May 2016. In addition, the governor appointed a seasoned banker, Uduak Ewitat as new Chairman; Ebong Okon Bassey as Managing Director, Patrick Ifon, Barr. Emmanuel Udoh, Hon. Akan-Mary Udoh, Rt. Hon. (Engr.) Asuquo Odiong, Peter Udoh and Akan Okon, Commissioner for Finance as members of Board of Directors.

In setting the ball rolling, the board advertised vacant positions, interviewed applicants and later employed Ubong Uwah as Business Development Manager; Oliver Ernest, an accountant as the financial controller while Barr. Abasiama Idiong is the Company Secretary in the management team of the bank.  Although the bank debt profile stood at N1.6 billion, the new management has recovered N90 million loan.  “When we came in about a month ago, we went into aggressive loan recovery. As at now, we have recovered almost N90 million of our bad debt. And we believe by the end of this year, we will recover up to N190 million. So, we believe that out of the N1.6billion exposure to bad debt, we would recover 50 per cent of value by 2019 because the loans were given to Akwa Ibom indigenes’’, the managing director, Ebong Bassey said.

On repayment of debts owed civil servants and staff by the bank, he noted thus: ‘’His Excellency, Governor Udom Emmanuel has graciously released N1.5 billion to the bank and we will use this to pay all sort and what not to our customers and generate more. That is why I said we have given ourselves target to raise another N1.5 billion. We would have the funds in our account anytime from now. That’s why we will make our customers smile again. That is why government reconstituted another board and new management to manage the funds judiciously. We will pay off all our civil servants, customers and other persons all their outstanding debts 100 per cent, but we will have to look for other businesses to strengthen us so that where we are, we won’t go back the way we are presently.

To ascertain the number of staff in the bank, the board ordered for personnel audit. Already, the bank has 200 staff, 153 core staff and about 53 contract staff. Bassey dispelled fears of retrenchment of staff thus ‘’When the Board met the second day, we suggested downsizing from 200 to 150 but by doing this, 99 per cent to 100 per cent are Akwa Ibom indigenes and there will be bad blood. So, we decided to set target that those ones who will not be able to fit in will have to fall by the way side because it is a limited liability company. We must run profitably. At present, we are doing financial audit. We are auditing the bank from January 2007 to July 2016. Why we are doing this auditing is that we want to really establish the base when we take off so that in the future (one or two years), the bank will be able to run profitably. I believe by next week, the consulting firm approved by the State Auditor-General will finish the auditing of the bank so that we can ascertain the true position of financial standing of the bank’’, the seasoned banker asserted. He further noted thus: ‘’Akwa Savings is not a Ministry or extension of Ministry of Finance so we must run profitably and make our shareholders, investors, staff and everybody happy. With this team, we are set to move to the market, open the shop and revive the ailing bank come October 1, 2016 as instructed by His Excellency, Mr. Udom Gabriel Emmanuel’’, the new managing director stated.

‘’We met the bank as a civil service office not as a bank. But we are training and retraining to ensure that the people start to imbibe a new set of culture, new orientation and new direction. With the Dakkada philosophy which I know that most of my staffs are aware of, everybody will rise to meet the standards of the bank. We now have policies and we are guided. Our dress code is now like a bank not like an extension of a ministry. People now come to work by 7 a.m. They are now devoted and have acquire other skills than before, showing the readiness of the new Akwa Savings and Loans to grow’’, said Mr. Ebong Bassey.

According to him, ‘’We are also sending a letter and updating the Ministry of Finance which we are reporting to on what we are doing. We have presented our road map, a five-year strategy to the board which they were happy about. We have also submitted the same to His Excellency through the Commissioner of Finance who is also a board member. Our prayer is that His Excellency should recapitalize the bank and we believe that the bank will soon be recapitalized. I had earlier said we have presented our five-year strategic roadmap and that is where we are right now. We don’t want to start saying that things went bad or this or that. We have a target and we will also share our target to ourselves. Between October and December, we want to raise liability of N1.5 billion. We have also planned to make recovery of about N200 million or specifically, N190 million’’.

So far, the financial institution has been registered with Federal Mortgage Bank of Nigeria and Nigeria Re-finance Company and is a member of Mortgage Bank Association of Nigeria. “Recently, we attended a course on African Union Housing Finance Conference organised by Nigeria Mortgage Finance Company. We were presented with series of papers on how we can provide affordable houses for Akwa Ibom indigenes and we are home to ensure that in 2019, more than 500 Akwa Ibom indigenes will have affordable houses. Affordable house is different from just a house, but we want the people to have an affordable house costing between N4-5million. We are praying that most of the Akwa Ibom indigenes who are contributors to National Housing Funds can have houses as soon as possible. This is the core trust of our banking-mortgage, and we are going back to the root.

‘’Her name is Akwa Savings and Loans; we will encourage savings. By the time we encourage savings, our loans will go into mortgage and the dreams of the founding fathers of the bank will come to pass. When a Grade Level 10 officer owns a house and then one asks, how did you get this? He will reply that it is through Akwa Savings, and that will be our joy. We believe that in the nearest future, we can achieve this. In as much as we are also getting revenue on behalf of the government, we will focus on mortgage. We plan to hold Customers’ Forum before October 15 to plead, talk and sensitize our customers on the need for them to still remain as our customers because we are going to meet their obligations. We will open our doors and we are appealing to all good people of Akwa Ibom to encourage the only indigenous bank to continue to survive. With this, the bank will make N60 million monthly rents and will use about N25 million to pay staff salary. We have re-deployed our staff, done postings (where it is necessary). We have started talking to our high network customers, people who own about 80 per cent of our business and we believe that by the time we open our doors by the mid October, we will be able to meet all our customers’ obligations’’, the managing director asserted.

To sustain financial stability of the bank, experts spoken to appealed to the State Government to release N3.5 billion for recapitalisation of the financial institution as a way of consolidating its foothold in the mortgage business and living up to the billings of its teeming customers. The managing director in his view noted: “We have sent a letter, updating the Ministry of Finance which we report to, on what we are doing. We have presented our road map, a five-year strategy to the board which they were happy about. We have also submitted same to His Excellency through the Commissioner of Finance who is also a board member’’, he pointed out.                                                     

Experts have observed that there are only one or two mortgage institutions in the State. They believe that Akwa Saving and Loans Limited will be the preferred choice. They are Mutual Alliance and Trans-Atlantic Mortgage which are privately owned. It is believed that the State owned Mortgage Bank is placed in an advantageous position to compete with other commercial banks because Akwa Ibom sons and daughter work there.

In a chat with the Managing Director, he observed that: “The Labour, Federal Civil Service and the State Civil Service are going to do business with us because we are sure. The State Government has given us some plots of land and they have also assisted us in grading roads in those lands. And what we will do is to get affordable houses. By the time we will be able to construct 100 houses, the rest of the indigenes will come. So if we have 3,000 people coming here for mortgage, every month we will be having standing order of transfer of about N20,000 each person. So we will be cruising and by then, our staff strength will be increase and profit will be made. We strongly believe that the confidence and the trust Governor Udom Emmanuel has in us- the Board and Management- will ensure that Akwa Savings and Loans remains a bank to be reckoned with not only in the State but also in terms of mortgage and provision of affordable houses”.

With the incredible strategies put in place by the board and management, the bank is bouncing to mortgage and banking businesses. It might have failed before, but it has learnt the ropes of survival of the fittest. Who knows what the bank may become in years to come. With time, the revitalised bank will return to the path of financial boom to restore confidence and attract more patronage from the government and the public.

Israel Umoh, a journalist contributed this piece from Uyo

 

 

 

 

 

 

 

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