GTCO, UBA, Zenith Bank in N14.97tn customers’ litigations in 2021

Three leading financial institutions in Nigeria, Guaranty Trust Holding Company Plc (GTCO), United Bank for Africa Plc (UBA), and Zenith Bank Plc were involved in litigations and customers’ claims worth N14.97trillion in 2021, WesternPost can report.

Extract from the three banks’ 2021 financial year results and accounts revealed hike in litigations as more customers opted to sue banks over excess charges, among other finance related matters.  

Cases involving these banks also jumped in 2021 from the previous year. It was gathered that cases involving UBA for instance, jumped from 1,000 in 2020 to 1,363 in 2021, while that of GTCO rose from 507 in 2020 to 721 by 2021.

In terms of claims, GTCO customers were demanding N14.12trillion in 2021 from N13.09trillion in 2020, while those of UBA closed 2021 at N698.95billion from N385.07billion in 2020.

For Zenith Bank, it reported N143.5billion customers’ claims in 2021 from N78.8billion in 2020.

GTCO’s customers’ claims, litigation

The Group, in its ordinary course of business, is presently involved in 721 cases as the defendant (31 December 2020: 507) and 442 cases as the plaintiff (31 December 2020: 415). The total amount claimed in the 721 cases against the Group is estimated at N570.08 billion and $32.82 million (31 December 2020: N440.83 billion and $32.60 million) while the total amount claimed in the 442 cases instituted by the Group is N98.64 billion (31 December 2020: N180.48 billion).

However, the solicitors of the Group are of the view that the probable liability which may arise from the cases pending against the Group is not likely to exceed N205.38 million (31 December 2020: N190.20 million). This probable liability has been fully provided for by the Group (please refer to Note 38).

UBA’s litigation and claims

The Group, in the ordinary course of business is currently involved in 1,363 legal cases (2020: 1000). The total amount claimed in the cases against the Group is estimated at N698.95 billion (2020: N385.07 billion). The directors having sought the advice of professional legal counsel, are of the opinion that no significant liability will crystalise from these cases beyond the provision made in the financial statements.

Zenith Bank’s legal proceedings

The Group is presently involved in several litigation suits in the ordinary course of business. The total amount claimed against the Group is estimated at N143.5 billion (31 December 2020: N78.8 billion). The actions are being contested and the Directors are of the opinion that no significant liability will crystalise from these cases, and they are not aware of any other pending or threatened claims and litigations. In arriving at this conclusion, the Group has relied on evidence and recommendations from its internal litigation group and its team of external solicitors.

Background story

A lawsuit involving MTN Nigeria’s MoMo PSB and 18 Nigerian banks has been generating reactions from Nigerians. While reports say MoMo had dragged the banks to court to retrieve N22.3 billion “erroneously transferred to 8,000 bank customers”, many are blaming the banks for being tightfisted when it comes to refunding money.

Reacting to the report on Twitter, bank customers who had experienced difficulty in getting refunds for failed transactions said getting a reversal of funds from Nigerian banks could be very tough. Others are also accusing the banks of trying to stiffle innovations brought by the PSBs and fintechs.

However, in this case, the banks may not be the culprit as the money was said to have been transferred to customers’ accounts, some of whom may have withdrawn and spent the money.

In a suit marked FHC/L/CS/960/2022 and filed on May 30, 2022, the PSB asked the court to declare that the deposits worth N22.3 billion belonged to it (Momo PSB) and not the banks’ customers.

The affected banks, listed as defendants in the suit, are Access Bank, Ecobank, Fidelity Bank, First Bank, First City Monument Bank, Guaranty Trust Bank, Heritage Bank, Polaris Bank and Providus Bank. Others include StanbicIBTC, Standard Chartered, Sterling Bank, Suntrust Bank, Union Bank, United Bank for Africa (UBA), Unity Bank, Wema Bank and Zenith Bank.

Reacting to the report via a Twitter thread, a tech investor, Victor Asemota said: “For MTN to be taking the banks to court in Nigeria means that they have exhausted all other means. This is MTN, the most valuable company in the country having problems with banks. You can imagine what a small fintech deals with. Even a regular customer. Till today, my money vanished.”

“Banks will doom whatever progress is being made with financial services until they are replaced. The best way to replace them will be alternate integrations,” he added.

Another popular Twitter user, Rinu Oduala said: “Nigerians banks are so terrible. Ordinary POS payments are untraceable for them.”