Stanbic IBTC battles 423 court cases amounting to N266.48bn

STANBIC IBTC Holdings Plc says it is contesting a total of 423 court cases arising from alleged errors, omissions and breaches, which amounted to N266.48 billion claims against the bank as at March 31, 2023.

The bank disclosed this in its unaudited financial statements for the period ended March 31, 2023.

The bank further stated that there were no other events that could have a material effect on its financial position after this date that had not been recognised or disclosed.


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“The Group’s total litigation as at 31 March 2023 consisted of 423 cases with an aggregate value of monetary claims against the Stanbic IBTC Group, and was N266,482,898,483.15; USD$4,468,675.78 and GBP£75,840.71,” it said

The Group considered the claims against it as generally having a low likelihood of success.

It said, “In the ordinary course of business, the Group is exposed to various actual and potential claims, lawsuits and other proceedings that relate to alleged errors, omissions, and breaches.

“The directors are satisfied, based on present information and the assessed probability of such existing claims crystallising that the Group has adequate insurance cover and/or provisions in place to meet such claims.”

The bank maintained that the ultimate resolution of any of the proceedings would not significantly affect the group.

However, it said, “Where the group envisages that there is a more than average chance that a claim against it will succeed, adequate provisions are raised in respect of such claim.”

Stanbic IBTC disclosed it was also involved in litigation against the Asset Management Corporation of Nigeria (AMCON), a body established to take over banks’ non-performing loans (NPL)

The bank had in December 2012 entered into an agreement with AMCON to purchase what it called “Eligible Assets” (non-performing loan) of a client, which the bank had classified as “doubtful”, The ICIR can report.

It stated, “AMCON confirmed its willingness to purchase the proposed Eligible Assets (used as collateral in monetary policy operations) at a total consideration of about N10 billion, which sale/purchase was concluded in December of 2012.

“As a precondition for the sale, AMCON unequivocally stated that the pricing of the Eligible Bank Assets was subject to adjustment within twelve (12) months in line with AMCON guidelines after due diligence on information the Bank had supplied to AMCON.”

AMCON had by a letter dated October 4, 2017 informed the bank of its intention to re-price the loan and claw back the sum of N5.7 billion, being what was alleged to be excess overpaid consideration, as a result of what was felt was an overvaluation.

In its response to the allegation, the bank said it “emphatically” denied the allegations and provided evidence to AMCON to the contrary.

“The Bank noted that AMCON’s attempt to re-price the sold assets was outside the 12-month claw-back period provided in AMCON’s guidelines.






     

     

    “Notwithstanding all the clarifications made by the bank, AMCON proceeded to apply to the Central Bank of Nigeria (CBN) to debit the bank’s account with the sum requested to be clawed back, plus possible accrued interest,” Stanbic IBTC said.

    On July 31, 2019, the apex bank wrote to Stanbic IBTC, informing it of AMCON’s request to debit its account.

    Following this, the bank said it instructed its lawyers to institute a legal action against AMCON, pursuant to which it obtained an interim injunction (ex-parte), restraining AMCON and the CBN from debiting its account for the alleged claw-back sum.

    “However, the Bank subsequently discovered that AMCON had earlier filed a suit at the Federal High Court, Lagos Division, on the same subject matter. Consequently, the Bank discontinued its suit against AMCON and filed a counter-claim against AMCON in its suit,” it added.

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