By Alex C
Union Bank of Nigeria Plc is set to divest from four of its portfolio companies and focus on its core areas of expertise while awaiting regulatory approvals from The Nigerian Stock Exchange (NSE) and the Central Bank of Nigeria (CBN).
The Board noted that the Union Bank should divest its shares in its subsidiaries, with the exception of Union Pension Custodian Limited, which the Board resolved would be wound up and Union Bank UK Plc, which will be retained as the only subsidiary of the Bank.
The Bank has already held discussions with the CBN and interested investors had carried out in-depth due diligence exercises and rigorous bidding processes had been conducted with a view to selecting the preferred investor for each subsidiary.
Preliminary steps are being taken to wound up Union Pension Custodian Limited while preferred bidders have been selected for Union Homes Savings and Loans Plc, Union Assurance Company Limited and Union Capital Markets Limited and share purchase agreements have been executed with a view to making formal applications in respect of the transactions to all regulatory bodies.
Union Bank of Nigeria Plc will undertake the same processes for divestment from Union Registrars Limited, UBN Property Limited and the rest of the subsidiaries in due course.
This move to divest its subsidiaries is coming as branch optimization programme is underway with 13 branches currently being refit and another 53 slated to be completed before the end of 2014.
Commenting on the first quarter results ended 31 March 2014, Mr. Emeka Emuwa, Group Managing Director and Chief Executive Officer, Union Bank, said that the bank maintained its profitability and is delivering against key operational metrics supporting our strategy.
According to the CEO “The first quarter of 2014 was impacted by regulatory and monetary policy changes in the financial industry which curtailed earnings growth. Nonetheless, having clearly defined our growth strategy for the next three to five years, we remain focused on repositioning the business, increasing banking product penetration in the country and optimizing our cost structure”.
“Our loans to deposits ratio is improving and now stands at 52%, and our operating expenditure remains under tight control whilst we make new investments for growth. Building on our loan portfolio growth of 55% in 2013, we expect to continue to grow our loan book and expect a growth of about 30% by the end of 2014. Going forward, we remain confident that we will deliver on our growth aspirations for the year.”
A peep into its unaudited Q1 2014 results showed the Group’s gross earnings of N26.0 billion when compared to 29.4 billion it declared in the same period of 2013. Interest income stood at N18.8 billion when compared to N20.7 billion it realized in Qtr1 2013. Profit Before Tax (PBT) stood at N5.0 billion when compared to N7.7 billion it realized in the same period of 2013. Profit After Tax (PAT) stood at N5.0 billion when compared to N7.8 billion the Group realized in Qtr 1 2013.
The Bank’s PBT stood at N4.4 billion when compared to N4.6 billion it realized in the same period of 2013. Also, PAT stood at N4.4 billion when compared to N4.75 billion in Qtr 1 2013