How Hakeem Belo-Osagie Bought a Bankrupt UBA in 1994 and Sold It for $250 Million in 2005
- Hakeem Belo-Osagie discloses what he discovered about UBA before embarking on a major turnaround through sweeping reforms and restructuring
- Under his leadership, UBA's value grew from about $10–15 million to around $250 million by the time he and his investors sold their stake in 2005
- He said he exited the bank because he had always seen it as an investment and wanted to move on after years of regulatory scrutiny and attacks
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Legit.ng journalist Victor Enengedi has over a decade's experience covering energy, MSMEs, technology, banking and the economy.
For many investors, buying a distressed company is a gamble. For Nigerian businessman Hakeem Belo-Osagie, acquiring United Bank for Africa (UBA) in 1994 became one of the country's most remarkable corporate turnaround stories.
When Belo-Osagie led a group of investors to acquire the struggling lender, they believed they were buying a bank that merely needed restructuring. Instead, they discovered an institution on the brink of collapse.
Source: UGC
"After the first week or two, I now realised that the bank was bankrupt," Belo-Osagie said in a recent interview.
The discovery came as a shock. What appeared to be one of Nigeria's biggest banking acquisitions turned into an emergency rescue mission.
“There was this massive structure which you thought was this incredible thing you’ve bought, and then you just realise that, I’m sorry to say it, but for years, they’d basically been playing games with their accounts.”
According to him, UBA's financial problems stemmed from losses in its New York operations, poor consolidation of key accounts and years of weak corporate governance.
Cleaning Up a Broken Bank
The new owners quickly realised that restoring UBA required drastic reforms.
“We had to sack half of all the staff because they were hopelessly corrupt staff. We had to remove three-quarters of all top management,” Belo-Osagie recalled.
The restructuring was complicated by scepticism over the youthful management team and relentless investigations by multiple government agencies.
"We had to survive investigations by the Securities and Exchange Commission, Military Intelligence, State Security, Tax, Revenue, all parts of a continued attack," he said.
Despite the pressure, Belo-Osagie insisted the difficult decisions were necessary to save the bank.
He also warned that unless Nigeria's old-generation banks embraced sweeping reforms, newer institutions such as Zenith Bank, Diamond Bank and GTBank would eventually overtake them—a prediction that largely came true following the banking consolidation reforms of 2004 and 2005.
From Near Bankruptcy to a $250 Million Exit
Over the next decade, UBA's fortunes changed dramatically. Belo-Osagie said the bank's value increased from an estimated $10 million to $15 million when his group acquired it in 1994 to between $250 million and $300 million by the time they exited in 2005, despite the depreciation of the naira.
"So, all in all, I think we did a good job," he said.
Although the turnaround established UBA as one of Nigeria's leading banks, Belo-Osagie said he never intended to remain a banker.
"I never intended to hold on to it. I'm not a banker. I was merely an investor."
Why He Chose to Sell
By 2005, after years of rebuilding the bank and enduring constant scrutiny, Belo-Osagie believed it was time to cash in on the investment.
"I was frankly speaking a little bit tired of the constant attacks," he said.
Selling UBA for about $250 million became both a commercial and personal decision.
"You're sitting on this nominal profit. It's a huge gap between what I bought and the value. Why not? We crystallised the money made and went on to other things."
Following the exit, Belo-Osagie focused on expanding FSDH Merchant Bank and other investments.
More than two decades later, his stewardship of UBA remains one of Nigeria's most notable corporate rescue stories—transforming a bank he discovered was effectively bankrupt into an investment worth roughly a quarter of a billion dollars.
Source: Legit.ng
