UNION Bank of Nigeria has been acquired by Titan Trust Bank Limited, which barely started its operation in Nigeria three years ago after it won the central bank’s permit to run within the country.
This coming after the bank acquired a majority stake of 89.4 percent in Union Bank of Nigeria Plc, which has been in existence for over 100 years
Union Bank told Nigerian Exchange Limited (NGX) in a note on Thursday, “Completion of the transaction is subject to obtaining applicable regulatory approvals and the fulfilment of certain conditions precedent.”
It is believed that the transaction will soften the ground for Titan Trust to hold the largest equity stake by a single investor in any of the country’s publicly quoted banks, which implies that only a limited portion of Union Bank’s shares will be readily available in the open market when the deal is delivered except a corporate resolution to sell down parts of the newly bought interest happens.
Shares in Union Bank gained 9.78 per cent in Lagos following the news, to mark the biggest price increase by any stock of the 157 equities listed on the NGX.
Titan Trust has been operating in obscurity since inception, with a few branches.
Compared with Union Bank, Titan Trust Bank had recorded N2.9 billion in after-tax profit for 2020, while the former recorded N18.8 billion and an asset value of N136.3 billion, relative to the latter’s N2.2 trillion.
According to the Africa Report, Titan Trust Bank has positioned itself as a challenger with a heart for big things, making its takeover of better-known Union Bank obviously the biggest upset in Nigeria’s M&A scene so far in 2021 and potentially for the whole of the year.
The lender has an alliance with Citibank, headquartered in New York, which serves it as a correspondent bank.
As a result of the new change, another name will be adopted for Union Bank to reflect the takeover and for branding purposes, when the acquisition is perfected.
Recall that Union Bank launched as Nigeria’s second oldest bank in 1917 when London-based Barclays Bank opened shop in Lagos.
Titan Trust’s chair, Tunde Lemo, has said, “The deal represents a unique opportunity to combine Union Bank’s longstanding and leading banking franchise with TTB’s innovation-led model which promises to enhance the product and service offering for our combined valued customers.”
It should be noted that a British Virgin Islands-based financial services group and Union Bank’s biggest shareholder, Atlas Mara, has since January been the subject of a series of exclusive Bloomberg reports on the plan to offload its 50 percent holding in Union Bank.
Reacting to the transaction, the chairperson of Union Bank, Beatrice Bassey, said: “On behalf of the Board, we congratulate all the parties involved in reaching this phase of the transaction and the Board looks forward to supporting the next steps to ensure a seamless completion of the process following regulatory approvals. We are grateful to our current investors whose significant and consequential investments over the past nine years facilitated the transformation of Union Bank, one of Nigeria’s oldest and storied institutions. Today, the Bank is well-positioned with an innovative product offering, a growing customer base of over six million and consistent year on year profitability. This is a solid foundation for our incoming investors to build on as we move into a new era for the Bank.”
Also commenting on the takeover, chairperson of Titan Trust Bank, Tunde Lemo, said: “The Board of Titan Trust Bank and our key stakeholders are delighted as this transaction marks a key step for Titan Trust in its strategic growth journey and propels the institution to the next level in the Nigerian banking sector. The deal represents a unique opportunity to combine Union Bank’s longstanding and leading banking franchise with TTB’s innovation-led model which promises to enhance the product and service offering for our combined valued customers.”
The Chief Executive Officer of Union Bank, Emeka Okonkwo, also commented, saying: “This transaction marks a significant milestone in the journey of our 104-year old Bank. Whilst thanking our current investors for their unwavering commitment to the Bank over the years, we welcome our new core investor, TTB. We recognize thestrategic fit between the two institutions and expect that this deal will deliver the best outcome for our employees, customers and stakeholders. We look forward to collectively writing the next exciting chapter for Union Bank.”
In his reaction, the Chief Executive Officer of Titan Trust Bank, Mudassir Amray, said: “After completing over two years of operations with aggressive organic growth, we are excited to have an opportunity for a significant leap forward in market share. UBN’s widespread presence, state of the art technology platform, quality staff and strong brand loyalty fits well with our synchronized modular strategy. We look forward to delivering superior results for the benefit of our staff, customers, shareholders, and stakeholders.”
