Aggrieved customers and parties have initiated 932 court cases against Guaranty Trust Bank (GTB), also known as Guaranty Trust Holding Company PLC (GTCO).

Economy Post learnt from the bank’s half-year 2023 financial statements released to the Nigeria Exchange Group that the litigants are demanding N595.9 billion and $24.05 million in damages and refunds from the Tier-1 bank.

As at December 2022, litigations against the bank numbered 842, with litigants demanding N609.5 billion and $33.08 million in refunds and damages. But the number of litigations rose by 90 in six months to June 2023. GTB lawyers believe the bank’s liability is far less than what is being claimed by the litigants.

“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 N880.23 Million (31 December 2022: N527.18 Million). This probable liability has been fully provided for by the Group (please refer to Note 37),” the bank said.

GTB sues customers, others

Based on contingency records seen by Economy Post, GTB has also initiated 452 cases against customers and other parties. The bank is claiming N95.59 billion in refunds and damages, a 13 percent higher than N109.73 billion demanded in December 2022.

Innoson vs GTB case rages

Does anybody still remember the celebrated Innoson vs GTB case? Innoson Group, a GTB customer, instituted a case against the bank in 2011, claiming “excessive and unlawful charges” by the financial institution.

The vehicle assembler subsequently said that the bank owed it N8.9 billion in annual compounded interest.

In 2019, Innoson claimed ownership of GTB, saying that a judgment had given a nod to the company to take over the bank. Innoson said the apex court upheld a ruling earlier given at a federal high court in Ibadan in that light. The bank, however, denied Innoson’s claim.

There was an uproar at that time, especially as the Supreme Court dismissed GTB’s appeal in the February 27, 2019 ruling delivered by the Court of Appeal, Ibadan, Oyo State.

But in 2023, the apex court reversed its earlier ruling, re-admitting the GTB’s appeal, according to The Punch.

Why the court cases?

There are many reasons why either banks or customers initiate legal cases. A lawyer, Dr Sam Oyigbo, explained that fraud and violations of contractual terms could lead to litigations.

“Banks and customers have contractual relationships. If there is a breach of contract or inability to resolve through alternative resolutions, either of the party can go to court,” he said.

“If you prepare a cheque and the bank fails to honour it, you can go to court. If you wrongfully make a payment, you can go to court to get an order of reversal. The documents customers sign at banks are very critical. So, customers must read them carefully before appending their names. However, when something happens between customers and banks, the court will look at circumstances surrounding it, irrespective of the documents signed at the bank.

“Similarly, the banks can sue their customers if they fail to repay loans. They can also do so when there is a breach of agreement or someone tries to bring a bank into disrepute,” Oyigbo further said.

Another lawyer, Ms Deborah Nyang, explained that some banks were facing litigations from customers due to loss of funds to fraudsters.

“This happens especially when there is loss of money in the bank account of someone who does not have an ATM card or does not do online banking. Should you lose your money through online sources, you can sue the bank. Also, the banks could sue customers for beach of agreement, fraudulent practices or activities that could cost the bank some good will,” she added.

A financial analyst, Mr Ike Abununo, however, urged banks to begin to resolve matters quickly with customers, stressing that why several matters would go to court was because banks were failing to attend to customer complaints.

“If a bank fails to attend to a customer’s complaints or does not act in a manner that shows that it cares, people will be forced to litigate. Banks must change their strategies and learn to solve customer issues as quickly as possible. They must remember that without customers, there will be no bank.”

GTB refuses to speak

Repeated text and WhatsApp messages sent to the Chief Communication Officer, GTCO, Ms Oyinade Adegite, to explain why the bank’s legal cases were rising were ignored.