Union Bank plans hybrid offer next year
Union Bank of Nigeria Plc plans to float a hybrid offer next year in its quest to remain formidable in the Nigerian banking industry. Consequently, the bank has obtained the permission of shareholders to float a combination of rights and public offer as well as a global depository receipt (GDR).At the 38th annual general meeting held in Abuja last week, shareholders approved the bank's recapitalisation plans, part of which includes the issuance of 1,117,650,000 ordinary shares out of the unissued share, to be allotted to existing shareholders.
Union Bank currently has 15 billion authorized shares, out of which, only about 9.65 billion units are on issue.According to the notice to shareholders in the annual report, "The new shares be issued and allotted provisionally to existing shareholders and that any shares not taken up by the existing shareholders within a stipulated period to be determined by the directors shall be offered for sale first to other interested shareholders of the company." The GDR, which will also be issued out of the un-issued shares of the bank after consideration of the rights issue, will be by way of preferential allotment. Mr. Barth Ebong, group managing director said the bank is challenged to do better in view of the extreme competition in the industry. "The kind of business we do today are huge. We require huge capital to in order to meet the required single obligor to grant such financing. That is why we need huge capital in the banking industry today."He told shareholders of the intention to list more of its subsidiaries on the Nigerian Stock Exchange (NSE).
The bank's full fledged subsidiaries include Union Trustees Limited, Union Assurance Company Limited, Union Capital Markets Limited, Union Registrars Limited, Union Property Company Limited and Union Homes Savings and Loans Plc which was listed in 2005. "As we grow more of our subsidiaries, we will ensure that they are profitable enough to make us proud." He said the bank was undergoing a transformation of its operations in order to improve on the quality of service. "Our channels of distribution will be improved. We are reviewing staff salaries because of the need to attract and retain good hand and we will endeavour to have presence in major commercial centres across the country. At the end of the transformation, the bank will be placed on an unassailable position in the banking industry in Nigeria," he said.
For the year ended March 31 2007, the group posted gross earnings of N88.1 billion, 32.3 per cent above the N66.6 billion posted in the comparable period of 2006. Profit after tax rose by 22.4 per cent from N10.8 billion to N13.22 billion while dividend increased by nearly 54 per cent from N6.3 billion to N9.65 billion which translated to N1.00 per 50 kobo share. Shareholders also got a bonus of one for every five previously held.
Union Bank currently has 15 billion authorized shares, out of which, only about 9.65 billion units are on issue.According to the notice to shareholders in the annual report, "The new shares be issued and allotted provisionally to existing shareholders and that any shares not taken up by the existing shareholders within a stipulated period to be determined by the directors shall be offered for sale first to other interested shareholders of the company." The GDR, which will also be issued out of the un-issued shares of the bank after consideration of the rights issue, will be by way of preferential allotment. Mr. Barth Ebong, group managing director said the bank is challenged to do better in view of the extreme competition in the industry. "The kind of business we do today are huge. We require huge capital to in order to meet the required single obligor to grant such financing. That is why we need huge capital in the banking industry today."He told shareholders of the intention to list more of its subsidiaries on the Nigerian Stock Exchange (NSE).
The bank's full fledged subsidiaries include Union Trustees Limited, Union Assurance Company Limited, Union Capital Markets Limited, Union Registrars Limited, Union Property Company Limited and Union Homes Savings and Loans Plc which was listed in 2005. "As we grow more of our subsidiaries, we will ensure that they are profitable enough to make us proud." He said the bank was undergoing a transformation of its operations in order to improve on the quality of service. "Our channels of distribution will be improved. We are reviewing staff salaries because of the need to attract and retain good hand and we will endeavour to have presence in major commercial centres across the country. At the end of the transformation, the bank will be placed on an unassailable position in the banking industry in Nigeria," he said.
For the year ended March 31 2007, the group posted gross earnings of N88.1 billion, 32.3 per cent above the N66.6 billion posted in the comparable period of 2006. Profit after tax rose by 22.4 per cent from N10.8 billion to N13.22 billion while dividend increased by nearly 54 per cent from N6.3 billion to N9.65 billion which translated to N1.00 per 50 kobo share. Shareholders also got a bonus of one for every five previously held.
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