UBA to form Holding Company, Get Shareholders Approval

Shareholders of United Bank for Africa (UBA) Plc, Thursday  approved  its plan to restructure into a financial services holding company(holdco).

The approval, which was given by the shareholders at a court- ordered meeting   in Lagos, will enable UBA comply with the new licensing regime of the Central Bank of Nigeria (CBN).

UBA Plc  will operate a new structure, where a non-operating company to be listed and known as UBA Holdings Plc, will become the parent company of three intermediate holding companies namely; United Bank for Africa Plc, UBA Africa Holdings Limited and UBA Capital Holdings Limited.

United Bank for Africa Plc will hold the Nigerian commercial banking businesses, including the Bank’s branch in New York, UBA Pensions Custodian and UBA FX Mart; UBA Africa Holdings Limited will hold and oversee all the African commercial banking businesses excluding Nigeria while the Group’s investments in non-commercial banking businesses will be held by UBA Capital Holdings Limited in the new arrangement.

Speaking at the meeting, the Group Managing Director/Chief Executive Officer of UBA, Mr. Phillips Oduoza, said UBA Plc would remain a listed entity on the Nigerian Stock Exchange.

“Existing shareholders will cede 60 per cent of their holding in UBA Plc for 100 per cent  ownership of UBA Holdings Plc. In addition, UBA Plc will divest its ownership of African banking and non-commercial banking subsidiaries to UBA Africa Holdings Plc and UBA Capital Holdings Plc.  These two entities will in turn be wholly-owned by UBA Holdings Plc,” he said.

According to him, this new move would eliminate duplication across business lines, whilst improving overall coordination, emphasising that  the assets of the commercial banking business in Nigeria would be ring-fenced from the other businesses.

He said: “The restructuring will also lead to shareholder value maximisation as the spun-off entities will post restructuring, be able to compete and grow their businesses through efficient asset utilisation and strategic focus independent of the Bank. “It is also expected to provide more robust governance and risk management framework, driven by core principles of responsibility and accountability.”

Oduoza explained that the restructuring of UBA did  not affect the bank’s current relationships with customers and as it only relates to the re-organisation of entities within the Group, saying, ”the terms and conditions of our existing contracts and obligations shall remain valid.”