Union Bankâ€™s stakeholders list options for recapitalisation
Category: Capital Market
TUESDAY, 19 OCTOBER 2010
The board and stakeholders of Union Bank of Nigeria Plc have agreed to take all necessary steps that would fast-track the recapitalisation of the bank by strategically combining the AMCON option, core-investor and shareholders’ rights issue in order to raise the capital needed to enable the bank function optimally.
This was part of the consensus reached at the stakeholders’ forum initiated by the bank held at the Oriental Hotels, Lagos recently. The forum comprised of major shareholders in the bank. This included staff, pensioners, some shareholders association leaders, large number of shareholders (some of whom are customers of the bank), opinion leaders, captains of industries, etc.
In their submission, the stakeholders opined that the core investor should be an investor which had been in existence for years with known financial pedigree and global clout that will give Union Bank leverage in the industry.The forum also suggested that the board and management should involve credible shareholders with substantial holdings to be part of the engagement processes with interested investors.
In his opening remarks, the board Chairman, Prof. Musa Yakubu, reiterated that the Central Bank of Nigeria’s intervention in the bank was based on poor corporate governance, high level of non-performing loans, capital inadequacy and liquidity issues. However, with its forbearance, Union Bank had remained surefooted to address these challenges with the support and understanding of its stakeholders, particularly customers.
In a graphic presentation, the Group Managing Director/Chief Executive, Mrs. Funke Osibodu took the stakeholders through multitude of issues which bordered on several regulatory infractions relating to violation of prudential guidelines, poor financial control and accounting, suppression of expenses, unreconciled items, poor corporate governance, prevalence on non-performing loans, etc.
She said that with the determination to restore the bank to reckoning, the management focused on the strong and positive brand attributes of the bank to rekindle stakeholders’ confidence. Accordingly, the bank was being repositioned in all its operations to ensure excellent customer service, through redeployment of key and senior managers. Additional staff is being recruited with training to be done largely through an e-learning platform. All staff are to be performance driven.
The physical infrastructure of the bank is being upgraded in branches with some branches designated as flagship branches as well as optimally utilising its information technology infrastructure to achieve not only group synergy but to enjoy the benefits of the bank’s flexclube software.In conclusion, the stakeholders pledged their support for the action of the Central Bank, and the various initiatives by the board and management of the bank. They requested the bank to hasten its recapitalisation process.