Union Bank secures shareholders’ approval to raise fresh N50bn via rights issue

Shareholders of Union Bank of Nigeria have approved the request of the Board of Directors to raise N50 Billion for the bank’s growth plans. The approval was given at an Extra Ordinary General Meeting (EGM) held in Lagos. However, this is subject to the company obtaining all requisite regulatory approvals.
Some shareholders of the bank however advised the board to judiciously look at the period and ascertain the right time to float the offer, since prevailing challenges may retard investors from investing.
Others expressed concern at the possibility of reconstructing their shares, having earlier done this before.
Details of the special and ordinary resolutions include, increase in the bank’s authorized share capital from N9, 511,562,500, divided into 19,023125,000 ordinary shares at 50 Kobo each to N17, 500,000,000, divided into 35,000,000,000 ordinary shares of 50 Kobo each by creation of an additional 15,976,875,000, ordinary shares of 50 Kobo each ranking pari passu, in all respect with the ordinary share of 50 Kobo.
Chairman of the bank, Mr. Cyril Odu, explained to shareholders that the journey so far and the bank’s performance were encouraging, which underlined the successes of the many strategies driving the bank’s core banking operations and its thriving business. Although shareholders still have to wait until the bank will be able to scale regulatory hurdles before they can get dividends.

Union Bank which has been struggling in the past few years witnessed considerable growth in its first, second and third quarter financials for 2016.
For instance, Union Bank Group’s nine-month result for the period ended September 30, 2016 showed that the group’s gross earnings rose by 12 per cent to N93.43 billion as against N83.72 billion recorded in comparable period of 2015. Customers deposit improved from N570.6 billion to N631.9 billion. Shareholders’ funds also increased from N238.6 billion to N253.1 billion. Cost-to-income ratio also improved to 63 per cent as against 76 per cent in comparable period of 2015.