Fidelity Bank set to acquire 100% equity in Union Bank UK Plc
…As shareholders express concerns
By Seun Ibiyemi
Fidelity Bank Plc on Monday said it had entered into a binding agreement to acquire 100 per cent equity stake in Union Bank UK Plc.
In a corporate filing at the Nigerian Exchange Ltd. (NGX)on Tuesday, the bank said the Central Bank of Nigeria (CBN) had issued ‘No Objection’ to its proposed acquisition of the bank, which commenced London operations in 1983.
The notice signed by Fidelity Bank’s Company Secretary, Ezinwa Unuigboje, said the transaction was still subject to the approval of the Prudential Regulatory Authority of the United Kingdom.
The bank said the acquisition was part of its expansion drive to expand and be able it to deliver it services to in such that it would exceed the needs of its growing clients.
It noted, “Union Bank UK commences operations from the heart of the city of London in 1983 to provide competitive banking services including personal banking, trades finance, treasury management and structured trade and community finance which offers to individual and corporate clients.”
Commenting on the agreement, Mrs Nneka Onyeali-Ikpe, the Managing Director/Chief Executive Officer, Fidelity Bank said, “This transaction aligns with our strategic plan of expanding our services touchpoints beyond the Nigerian market and providing straight-through services that meet and exceed the needs of our growing clients.
“The diverse bouquet and business model of union Bank UK offer a compelling synergy and we hope to build on the existing capacity to create a scalable and more sustaining service franchise that will support the wider ecosystem of our trade businesses and diaspora banking services.
Meanwhile reacting to this development, the Chairman, Issuers and Investors Alternative Dispute Resolution (IIADRI), Mr Moses Igbrude, said, “Acquisition or buying of shares of companies is the major objective of having a capital market.
“There must be a willing seller and a willing buyer with the resources to do the transaction involved.
“So Fidelity Bank acquiring Union Bank Uk is not surprising to me because the core investor there has since indicated their interest to divest from the bank and recently the shareholders approved the sale at the Extra Ordinary General Meeting (EGM).
“My concern is that the bank should utilise the proceed well to run and manage the bank for the benefit of all stakeholders.
“Since the Titan Trust Bank Limited is now the new investor, they are the one that will decide whether to use it for bad of good because they have the controlling power.”
Also, the National Coordinator of the Progressive Shareholders Association, Boniface Okezie said the development is in order and a welcome development.
“We gave a nod to the bank at the EGM to sell and distribute the money among the shareholders. If Nigerian Bank is buying it, I like it. It is a good one for Fidelity Bank which don’t have any offshore branch. Fidelity is a growing bank and needs it to consolidate in terms of sourcing for forex.
“Union Bank is selling to consolidate in the market and regain tier-one position in the local market. It has not been easy for them because a lot of distortion was carried out during the CBN intervention. The UK bank has not been growing revenue, they have been recording losses over the years. That is one major reason they want to dispose of it. You let it go when it wants to drive you down,” Okezie said.
The former President of Noble Shareholders Association and a shareholder, Chief Timothy Adesiyan, said, “None of all these old generation banks are worthy of writing home about, they have wasted our money and we are not growing younger with our investment in some of these banks.
“My concern is that any investor that thinks about them and how our money was wasted will not have rest of mind, the new generation banks are doing far better than them.
“Union Bank in Nigeria was offered for sale by the people who originally bought it when they discover it was not working. I am in support of the sale. When you buy something and it is not making profit, you need to sell it. I think they are planning IPO for recapitalisation. My belief is that Titan will be able to operate the bank very well in Nigeria.”
