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Stanbic IBTC may face significant financial losses, amounting to N268.274 billion, $4.4 million, and £74,284.64, due to various legal battles, including a long-standing case against the Asset Management Corporation of Nigeria (AMCON). The bank’s recently released Q1 2024 financial statement, submitted to the Nigerian Exchange Limited, highlights these risks.
In a detailed disclosure, Stanbic IBTC outlined its 12-year-old court case with AMCON, which has persisted through late April 2024. The issue stems from a December 2012 agreement in which Stanbic IBTC sold non-performing assets to AMCON for approximately N10 billion. According to the bank, AMCON later sought to reprice the assets and recover N5.7 billion, claiming overvaluation.
Stanbic IBTC contested these allegations, arguing that AMCON’s repricing attempt violated the 12-month period stipulated for such adjustments. Despite the bank’s evidence and clarifications, AMCON requested the Central Bank of Nigeria (CBN) to debit Stanbic IBTC’s account for the disputed amount plus accrued interest.
In response, Stanbic IBTC secured an interim injunction to prevent the debit and subsequently discovered that AMCON had initiated a related lawsuit at the Federal High Court in Lagos. Stanbic IBTC then filed a counter-claim against AMCON, with the case adjourned to April 29, 2024, for issue settlement.
AMCON, established to stabilize and revitalize Nigeria’s financial system by managing non-performing loans, remains a pivotal institution in this conflict.
Beyond the AMCON case, Stanbic IBTC disclosed that it faces numerous other legal challenges. As of March 31, 2024, the bank is involved in 415 cases with a total monetary claim value of N268.274 billion, $4.468 million, and £74,284.64. However, Stanbic IBTC reassures stakeholders that it has sufficient insurance and provisions to address these claims, which it believes have a low likelihood of success.
“Management believes that the ultimate resolution of any of the proceedings will not have a significantly adverse effect on the group. 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,” the bank stated.
As these litigations progress, the financial community remains attentive to the potential impacts on Stanbic IBTC’s operations and financial health.
