Union Bank of Nigeria Plc has admitted it may be facing its worst nightmare yet after a Nigerian court awarded N1.49trillion against the bank.
The bank looks to the Supreme Court to upturn the judgment made by the appeal court.
In the Union Bank’s ‘assessment of contingent liabilities’ contained in its 2022 financial report, the bank admitted the “matter was considered to be a key audit matter due to the size of the potential liability.”
The bank said no provision was made for the N1.49trillion judgment liability which is more than half of the lender’s N2.79trillion total asset.
Union Bank said, “The Bank is involved in various legal actions in the ordinary course of business, which has resulted in contingent liabilities amounting to N1.497 trillion as of 31 December 2022 (2021: N1.98 trillion).
“The most significant is a case with a total claim of N1.495 trillion (2021: N1.54 trillion) in which judgment had been awarded against the Bank and other co-defendants by a Federal High Court in prior years.
“The Bank appealed against the judgment, which is currently pending before the Supreme Court.”
Union Bank is also facing $15billion judgment debt awarded against it by a Federal High Court.
The court had in 2014 awarded the sum of £2.550 billion with 15 per cent interest yearly to Petro Union Oil and Gas Company Limited (Petro Union).
The case began in 1994 when Petro Union procured a cheque from a branch of Barclays Bank in the UK with a value of £2.556 billion and presented it at one of Union Bank’s branches in Lagos.
Petro Union claimed that it planned to construct some refineries and establish a bank with the money.
Union Bank however took the cheque and refused to give Petro Union the money.
The bank said, “In the case of Petro Union, while the Bank’s appeal was pending before the Supreme Court, its application for leave to amend its notice of appeal, to appeal on grounds of mixed law and fact, and to extend the time to apply for leave was dismissed.
“The Bank subsequently filed another application seeking the leave of the Supreme Court to appeal the judgment of the lower court. On 22 December 2021, the Supreme Court unanimously granted leave to the Bank to appeal the judgment of the Court of Appeal and to file its Notice of Appeal.
“The Bank filed an appeal on the 5th May 2022, but the Court is yet to fix a date for hearing after initial adjournment.”