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Union Bank to sell non-core banking subsidiaries

By on March 19, 2014

Union Bank Plc is in the process of selling its non-core banking subdiaries to allow it focus on areas of competitive advantage, particularly retail, commercial and corporate banking, the Group Managing Director, Mr. Emeka Emuwa, has said.

He said the divestment process would be concluded before year end, well ahead of the February 2015 deadline that the Central Bank of Nigeria has set for all Deposit Money Banks to do so.

Several other banks have complied with the CBN directive. GTBank, United Bank for Africa, and Diamond Bank have all sold their subsidiaries, while First Bank, FCMB and Stanbic IBTC Bank, a unit of South Africa’s Standard Bank, have adopted the holding company model.

Emuwa, who spoke with journalists in Lagos on Monday, however, said the bank would not divest from its London subsidiary, Union Bank United Kingdom.

He said, “We are divesting from all non-core banking subsidiaries except Union Bank UK. It is important to focus energy on areas of competitive advantage, that is, commercial banking.”

“Most of the subsidiaries are not aligned with our core vision. We hope to conclude the divestment by the end of the year, before the February 2015 deadline set by the CBN.”

Union Bank was among the nine banks that the CBN replaced their management during the banking sector crisis of 2009.

The GMD said his task and that of his team when they took over the management of the bank was to stabilise its operations and services.

Emuwa said the bank had drawn a roadmap to guide it over the next three to five years, pointing out that six strategic objectives had been identified to move the financial institution to the next level.

These objectives, Emuwa said, focused on quality of customer experience, client base, talent, banking platform, professional standards and earnings.

Branch upgrade, according to him, is gradually going across its 338 branches, recalling that the plan was to stabilise first before buildings technological platforms.

He said, “We rolled out 300 ATMs last year. Same number will be rolled out this year. Last year, we had two important tasks ahead of us; first was to immediately improve the bank’s operations by dealing with existing operational and service challenges; and second, to develop a road map to firmly establish Union Bank as a significant player within the Nigerian banking industry.”

The GMD said the bank’s strategic ambition was to become a highly successful provider of quality banking services.

“As we celebrate our centenary in 2017, we believe that we would have progressed extensively in the achievement of this ambition,” he noted.

The Executive Director, Commercial and Retail Banking (North), Union Bank, Mr. Brahim Kwargana, noted the bank had made considerable progress in its operations and services.

He said, “We have upgraded our ATM systems and improved our uptime and reliability. We have rolled out our mobile banking platform and have introduced new debit card offering.”

Following the banking reforms initiated by the CBN in 2009, the bank concluded a recapitalisation process with the injection of $500m by Union Global Partners Limited, a consortium of local and international investors.

At present, the bank is owned 65 per cent by UGPL; 20.04 per cent by the Asset Management Corporation of Nigeria; and 14.96 per cent by a diverse group of shareholders.

 

[Punch]

One Comment

  1. Moses Musa

    March 20, 2014 at 8:05 am

    Why no dividend in the last four to five years. That is robbery. Please pay us oh.