Shareholders Approve Union Bank Request For N50 Billion Right Issue
Shareholders of Union Bank of Nigerian Plc, has approved the request of board of directors to raise N50 Billion for the bank 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.
Commenting on the right issue, some of the shareholders advised the board of Union Bank to carefully look at the timing, because the current economic challenge, noting that it will be a big task for investors to path with their money in the name of investment. Others talked about the issue of share reconstruction, if the bank will not reconstruct their shares thereby reducing their holding, like they did in the past. While the issue of price was raised as they believe a good price for the share will lead to the success of the right issue.
Details of the special and ordinary resolutions includes, increase in the bank 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 share 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 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 hurdle before they can get dividend.
Union Bank which has been struggling in the past few years witnessed considerable growth in its first, second and third quarter financial for 2016. For instance Union Bank Group nine-month result for the period ended September 30, 2016 showed that group 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.