Union Bank of Nigeria Plc has successfully raised N49.7 billion through a Rights Issue from existing shareholders, showing a high level of investors’ confidence. The bank had made a Rights Issue of 12.1 billion ordinary shares of 50 kobo N4.10 per share between September and October, 2017.
According to the management of Union Bank, the proceeds of the rights issue will enhance the bank’s capital base and better position it to deliver stronger and sustained shareholder returns.
The bank said yesterday that at the close of the issue on October 30, it recorded a subscription level of 120 per cent.
The bank said the Central Bank of Nigeria (CBN) and Securities and Exchange Commission (SEC) concluded the share allotment and capital clearance review in December 2017.
Commenting on the outcome of the issue, Chief Executive Officer of Union Bank of Nigeria, Emeka Emuwa, said: “The support of our shareholders has been critical to the rebuilding and transformation of Union Bank over the past 5 years. With 20 per cent oversubscription of the Bank’s Rights Issue, they have once again demonstrated a high level of confidence and support for the bank’s short to medium term strategic priorities. Having successfully raised the required capital, we will accelerate the pace of doing business in 2018 as we begin to deploy this fresh capital across identified business areas which will increase our capacity to serve customers better while also delivering returns to our investors in the short to medium term.”
According to him, the new capital will also ensure the bank maintains a strong buffer above regulatory capital adequacy requirements as it drives towards its vision to be Nigeria’s most trusted and reliable banking partner.
Union Bank ended the nine months ended September 30, 2017 with profit before tax of N13 billion. Emuwa had said they remain encouraged by the results of our customer acquisition strategy, as customers continue to respond to our targeted market offerings and increased brand awareness.
This he said followed the debut of a new advertising campaign to support the launch of Union Bank’s new digital platform, including our revamped mobile banking app and *826#, our SMS banking platform.
Speaking in the same vein, Chief Financial Officer of the bank, Oyinkan Adewale said: “The Group’s net interest income after impairments improved significantly by 16 per cent from N35.2 billion to N40.9 billion compared to the period ended 30 September 2016. Non-interest income is down by six compared to 9M 2016, which included one-time revaluation gains. With our continued focus on early problem recognition and prudent provisioning, our coverage ratio has strengthened to 203 per cent as at 30 September 2017, from 182 per cent as at December 2016.”