Peter Ukuoritsemofe Ololo, a Nigerian stockbroker and entrepreneur, shut into the limelight when he was involved in an incident that led to the dismissal of the chief executive officers of five Nigerian banks. This was during the 2009 financial meltdown in Nigeria.
The accounting graduate from Ahmadu Bello University was said to have accessed loans worth more than $700 million from the five banks. This, in turn, resulted in bad loans to the Nigerian banking sector.
The former employee of Union Bank used the loan to start his own business as a financial expert.
The bad loan
With the ascension of Mallam Lamido Sanusi in early June 2009 as the governor of the Central Bank of Nigeria, Peter Ololo’s loan default to the five banks was made general to the public.
The delta State-born businessman owes the total sum of N88.3 billion in non-performing loans. Apart from the N88.3 billion bad debt, he also owned up to having other loans.
This includes UBA N12.7billion, Zenith N10billion, Ecobank N3.95billion, GTBank N1.4billion, Bank PHB N8.5billion, Standard Chartered Bank N5billion, Stanbic Bank (Self) N300million, First Bank N7.3billion, and FCMB N2.3billion.
The economic effect
Due to the impact of high bad loans in the banking industry, CBN’s ex-governor dismissed the five banks’ chief executive officers: Erastus Akingbola, Cecilia Ibru, Barth Ebong, Okey Nwosu, and Sebastian Adigwe, from their positions.
This includes poor corporate governance procedures, inadequate credit administration procedures, a disregard for prudent credit-risk management procedures, and a lack of inefficiency resulting in non-performing loans that jeopardise the viability of banks and the economy.
Together with the bad loans from Peter Ololo, the five banks collectively accounted for 39.9% of loans in the banking industry.
As of the second quarter of 2009, Oceanic Bank recorded the highest non-performing loan of N278.2 billion.
This was followed by Intercontinental Bank (N210.9 billion), Afribank (N141.9billion), Union Bank (N73.6billion) and Finbank (N42.4billionn). Together, they had N2.8 trillion, of which N456.3 billion came from margin loans issued to borrowers who wanted to purchase equities.
The oil and gas sector had N487 billion loan exposure. This puts the entire non-performing loans at N1.14 trillion or 40.81%.