June 02, (THEWILL) – Nigeria’s newest deposit money bank, Titan Trust Bank Limited (TTB), has brought to closure the deal enabling it to purchase a controlling stake in Nigeria’s second-oldest lender, Union Bank of Nigeria Plc, the latter said in a regulatory filing with The Nigerian Exchange (NGX) Thursday.
The deal was achieved almost half a year after an agreement was reached by both parties.
The lender, backed by a former Central Bank of Nigeria deputy governor, Tunde Lemo, set out to acquire 89.4 per cent interest in Union Bank from a pool of stakes from exiting major investors including British Virgin Islands-based Atlas Mara and Union Global Partners Limited, but later upped the stake to 93.4 per cent.
“With the completion of the transaction, TGI Group, parent of TTB, now becomes the majority shareholder and core investor in Union Bank,” the filing document said
The ownership transfer excludes Union Bank UK, a subsidiary of Union Bank of Nigeria, which also has been sold off, with the proceeds of divestment to all the shareholders of the latter as of March 4, 2022.
In the spirit of the change of ownership, the members of Union Bank’s board have exited the bank
It could be recalled that in December, 2021, the board of Union Bank of Nigeria announced that its investors, Union Global Partners Limited, Atlas Mara Limited and other shareholders, had reached an agreement with Titan Trust Bank Limited to divest their shareholding in Union Bank to TTB.
Titan Trust Bank, the newest national commercial bank in Nigeria, commenced operation in October 2019, according to a statement announcing the deal.
“The agreement, which is subject to regulatory approvals and other financial conditions, will upon completion, transfer 89.39 per cent of Union Bank’s issued share capital to TTB,” the statement said.
Speaking on the transaction at the time, the Chairman, Union Bank, Mrs Beatrice Bassey, said, “On behalf of the board, we congratulate all the parties involved in reaching this phase of the transaction and the board looks forward to supporting the next steps to ensure a seamless completion of the process following regulatory approvals.
“We are grateful to our current investors whose significant and consequential investments over the past nine years facilitated the transformation of Union Bank, one of Nigeria’s oldest and storied institutions.
“Today, the bank is well-positioned with an innovative product offering, a growing customer base of over six million and consistent year on year profitability.”
Union Bank of Nigeria reported a profit of N16.92 billion in 2021, reflecting a 9.39 decrease year on year.
The Nigerian lender also reported earnings per share of N0.66, a 0.22 percent decline from the N0.85 reported a year earlier.
The bank’s FY 2021 interest income grew by 0.79 percent from N113.16 billion in the previous year to N114.05 billion.
Union Bank’s 2021 profit performance was on the back of all margin decline as net interest income and trading income all depreciated year on year.
In its Q1 2022 interim report, the 105-year-old first generation bank recorded a drop in profit before tax (PBT) from N6.46 billion to N5.84 billion reflecting a 9.5 percent decline.
Profit after tax (PAT) also declined: from N6.20 billion in Q1 2021 to N5.55 billion in the review period as seen in the bank’s unaudited financial statement for three months of the year.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
