NEWS

UNION BANK SIGNS TRANSACTION IMPLEMENTATION AGREEMENT (TIA) WITH INVESTOR GROUP

On July 12, 2011 Union Bank signed a Transaction Implementation Agreement (TIA) with its potential core-investor, the African Capital Alliance Consortium (ACA Consortium) in furtherance to the Memorandum of Agreement (MOA) signed in March this year.

With this development, the Bank’s recapitalization process is progressing which would translate to the ACA Consortium investing $750 million in the Bank consisting of $500 million equity and $250 million Tier II capital.

The full capitalisation of the bank will be achieved through the Asset Management Corporation of Nigeria’s (AMCON) investment to bring net asset value to zero, Union Global Partners Limited’s investment and a Rights Issue, to be made to the bank’s existing shareholders.

This proposed investment by the ACA Consortium, AMCON and existing shareholders will restore Union Bank to capital adequacy and position it to regain its pride of place in the Nigerian banking sector. The bank will be able to rebuild its customer service franchise and restore its infrastructure to compete again across diversified financial services. The bank will also significantly focus on human capital development through staff training and development.

African Capital Alliance (ACA), a leading private equity investment firm, investing in West Africa, is leading a consortium of international investment groups and development finance institutions to invest in Union Bank. The ACA Consortium which will invest as Union Global Partners Limited, consists of ACA B-Holding Limited (comprising ACA managed funds, FMO Netherlands, and other co-investors), The Keffi Group VIII LLC based in New York, ABC Holdings Limited (Banc ABC Botswana), and Discovery Group (based in Connecticut USA). Members of the Consortium have invested in financial services and several other sectors in various areas of the world, over the past twenty years.

The execution of the TIA represents a significant milestone in the recapitalisation of the Bank ahead of the Central Bank of Nigeria’s deadline of September 30, 2011.

UNION BANK GMD/CE UNFOLDS REBIRTH AGENDA

"Union Bank remains a going concern as a big, strong, reliable Bank". With these words, the Group Managing Director/Chief Executive (GMD/CE) of the Bank, Mrs. Funke Osibodu, expressed resolve to reposition the Bank. The GMD/CE in her maiden press briefing in Lagos, said the management would focus on the following specific areas:

  • Risk management and control
  • Marketing and business development
  • People management

    RISK MANAGEMENT AND CONTROL
    The need to seriously strengthen our risk management system cannot be over-emphasised. We will strengthen our risk management system to be able to effectively guide decision-making relating to credit risk and operational risks.

    On credit risks, we will focus on the following key areas:
    • Aggressive loan recovery using both our internal machinery and the resources placed at our disposal by the law enforcement agencies.
    • We will also monitor and reduce our concentration risks by ensuring that the loan portfolio is more evenly spread with less impact on the Bank by large ticket items.
    • Furthermore, on our loan monitoring and control system, we will develop appropriate early warning signals and ensure that debtors are closely monitored by our team. That way, we would be able to proactively manage the clients to ensure timely recovery of facilities.

    On the operational side, we will ensure the integrity of the Bank’s accounting and financial reporting systems and that appropriate controls are in place, in particular, systems for monitoring risk, financial probity, and compliance with the law.

    The corporate governance structure will be built around enhancing transparency and accountability.

    MARKETING AND BUSINESS DEVELOPMENT

    As part of the on-going Enterprise Transformation Programme, there is a new operating model for our branches. The new model is designed to allow branches to give dedicated focus to marketing and relationship management.

  • Steps had also been taken to increase the ratio of our market-facing staff in the new system.
  • The organizational structure of the Bank will be changed to reflect the new expectations.
  • The Bank’s business module and portfolio would be reinvigorated to tap opportunities in diversified spheres.
  • Our branches will be upgraded to be customer friendly in physical ambience as well as working tools. Technology will be very key in this regards.
  • We will place emphasis on our brand management.

    PEOPLE MANAGEMENT

    Training to meet the requirement of the new environment is very important in motivating and ensuring performance. This area will be emphasized.

  • We are therefore emphasizing on capacity building to enable staff deliver on their set objectives.
  • We will pursue a merit-driven and objective performance management system where staff would be rewarded and promoted based on merit.

NEW UNION BANK BOSS ASSURES STAKEHOLDERS

The new Group Managing Director/Chief Executive of Union Bank of Nigeria PLC, Mrs. Funke Osibodu resumed office over the weekend with assurances to all stakeholders especially customers that the Bank will not compromise their interests and expectations, and stressed the need for them to remain steadfast with the Bank.

In an interactive session with members of the General Management, Zonal Coordinators and Business Development Managers across the country, Mrs. Osibodu reiterated the rationale behind the intervention of the Central Bank of Nigeria on Union Bank, which is to safeguard its corporate reputation and to rekindle public confidence in its brand.

She stated that “the change is to create strong enabling environment for growth of the Bank whilst enhancing several of the transformation going on within the Bank. As with all changes, there will be questions and fears by all stakeholders. You have my assurances that the change and the additional funding will positively enhance the Bank”.

The chief executive appreciated the warmth reception accorded to her by the exiting Group Managing Director and other exiting Executive Directors as well as members of the General Management, assuring staff not to entertain any fear of the change because Union Bank was being reinvigorated to face the challenges of serving its esteemed customers much better and swifter.

Mrs. Osibodu is bringing to Union Bank almost three decades cumulative banking experience from a versatile background where she had excelled in both retail and corporate banking. She was the Managing Director/Chief Executive of MBC International Bank and Ecobank Nigeria PLC, before becoming a director in the parent holding company of Ecobank, Ecobank Transnational Incorporated.

She has been a director of many companies including Consolidated Discounts Limited, First Securities Discount House Limited, ValuCard, Nigeria Interbank Settlement System, MBC Securities Limited and ESL Securities Limited. She is Chairman, Citi Investments Limited, Vice Chairman of Nigeria Economic Summit Group and a director of Enterprises for Development International, a Non-Governmental Organisation and the Centre for Law and Business – a private law university.

In addition to an excellent banking career, Mrs. Osibodu has held various positions of prominence in the business community and has served in various national committees. An alumna of the Harvard Business School, she is also a recipient of various awards.

Mrs. Osibodu, a graduate of Economics, Obafemi Awolowo University was the Managing Director/Chief Executive of Vigeo Capital Limited, a member of the Vigeo Group before her current appointment.