The Bank provides the following services:
- Cash Management
- Funds Mobilisation
- Portfolio Management
- Interbank Dealings
- Pricing/Rate Management
Products and services offered by the bank include:
- This instrument allows the customer to save and earn interest.
- Funds can be placed on overnight, 7-day or 14-day call.
- It is easily accessible.
- Minimum deposit is N50,000.00
- Tenor ranges from one month to one year.
- Interest paid at every maturity
- At maturity, the deposit could be rolled over.
- The product is subject to 10% withholding tax
- Treasury bills are government guaranteed debt instruments issued by the Central Bank of Nigeria (CBN)
- The Bank, on behalf of customers, purchases / sells Treasury Bills
- Interest is payable upfront
- Repayment is guaranteed at maturity
- It can be used as collateral for loans and other credit facilities
- Tenor ranges from 91 days, 182 days, and 364days
- Interest received is not subject to withholding tax
Bankers Acceptances (BAs)
- It is a short-term investment instrument
- Provides an avenue for corporate & other customers to invest surplus funds
- The rates are more attractive
- Interest is payable upfront
- At maturity, the investment could be rolled over
- Tenor ranges from 31 days ,91 days, 182days and 364 days
- Investment is secured in the event of borrower's failure
- Backed by the bank's guarantee
- It is a negotiable instrument
- An unsecured promissory note
- Issued by companies, pension funds, government agencies, individuals, etc.
- The note offered depends on how much the issuer wants to borrow, money market rates & credit rating of the issuer
- Cheaper than other sources of funds
- Most firms use the funds to finance short-term working capital
- Tenor ranges from 31 days, 91 days and 364 days.
- Both BAs and CPs are arranged by the Bank to provide facilities to customers, in addition to the more familiar bank overdrafts.
Nigerian Inter-bank Settlement System (NIBSS)
- This enables customers to transfer funds between banks/discount houses
- Secure and convenient means of payment
- Charges 0.01% of amount transferred by NIBSS
CBN Interbank Transfer Settlement
- This also enables customers to transfer funds between banks and other financial service institutions
- Through the Real-Time Gross Settlement System (RTGS) third party and interbank transfer are easily achieved.
Federal Government Bonds (FGN Bonds)
- Bonds are long-term financial obligations (debt) of any entity that promise to pay a specified sum of money at specified dates.
- Bonds could be classified as follows:
- Short-term, which have maturities of 1 - 5 years
- Medium-term, having maturities of 5 - 12 years
- Long-term, with maturities above 12 years
- The bond attracts interest at the rate that the issuer (FGN) agrees to pay the bond holders during the term of the bond, called Coupon.
- This is paid twice every year (semi-annually) within the life of the bond.
- Instruments issued by the CBN on behalf of the FGN
- An investor is only allowed a minimum subscription of N10,000.00 and N1,000.00 in multiples thereafter
- The Bank, on behalf of customers, purchases and sells FGN Bonds
Benefits To The Investors
- They can be used as collateral for loans and other credit facilities
- Zero weighting for capital adequacy purpose for banks
- Qualifies as liquid asset for liquidity ratio calculation for banks
- Not subject to single obligor limits for banks
- Quoted on the Nigerian Stock Exchange
- Interest received is not subject to any form of taxation unlike other investments
- No limit to investible amount including the pension fund administrators (PFA)
- Being government instruments, they are considered risk free
- Bond provides regular source of income to investors as coupon are paid semi-annually
- They often have less volatility (price fluctuation) than stocks
- Easily tradable on the Nigerian Stock Exchange as well as over the counter.
Click here to download Bond Application Form and submit your form to any of the Union Bank branches