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Union Bank raises 50 billion capital to accelerate growth

Union Bank raises 50 billion capital to accelerate growth

Union Bank of Nigeria (UBN) Plc anticipates improved performance in its business as it begins to deploy about N50 billion new capital raised recently from its shareholders.

Chief Executive Officer, Union Bank of Nigeria (UBN) Plc, Mr. Emeka Emuwa, said the net proceeds from the rights issue, which was oversubscribed by 20 per cent, would accelerate the pace of doing business as the fund will be deployed across identified business areas.

He said the success of the recent rights issue has once again demonstrated shareholders’ confidence and support for the bank’s short to medium term strategic priorities.

According to him, the support of the shareholders has been critical to the rebuilding and transformation of Union Bank over the past five years.

“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,” Emuwa said.

He added that 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’s recent rights issue exceeded its capital raising target by 20.33 per cent as majority core investors and minority shareholders jostled for additional shares and oversubscribed their provisionally allotted shares.

Union Bank had floated the rights issue to raise N49.745 billion from existing shareholders by offering 12.133 billion ordinary shares of 50 kobo each at N4.10 per share. The rights issue had been pre-allotted on the basis of five new ordinary shares of 50 kobo each for every seven ordinary shares held as at the close of business on Monday August 21, 2017.

Allotment results approved by the Securities and Exchange Commission (SEC) showed that Union Bank raised N59.87 billion as shareholders submitted 4,313 applications for 14.6 billion ordinary shares. The bank has however decided to retain its target of N49.745 billion and to return the excess monies to shareholders.

The breakdown of the allotment showed that 98.4 per cent of the shareholders accepted their rights in full with 52.03 per cent also applying for additional shares.

Emuwa had earlier outlined that the net proceeds of the rights issue to be used as working capital will be deployed to key growth sectors of the economy and Federal Government’s priorities including agriculture, manufacturing, solid minerals, services –health and education, construction and real estate and oil and gas.

 

Credit: The Nation Nigeria

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