One of Nigeria’s oldest financial institutions, Union Bank of Nigeria Plc., has entered a share sale and purchase agreement to divest its United Kingdom subsidiary, Union Bank UK Plc. (UBUK), the bank announced on Tuesday, January 28, 2020. MBU BidCo Limited (MBU), an acquisition vehicle wholly owned by MBU Capital Limited (MBU Capital), was selected as the preferred bidder after following a competitive bid process.
Union Bank claimed that the sale is aligned with its strategy to geographically streamline its business operations and focus more on growth opportunities in Nigeria. However, completion of the sale is highly dependent on relevant regulatory authorities in Nigeria and the United Kingdom.
Emeka Emuwa, Chief Executive Officer of Union Bank while commenting on the planned divestment said that “as the banking landscape shifts towards digital and agency banking to drive financial inclusion, the Nigerian market presents robust long-term opportunities for Union Bank.”
Emuwa further stated that through the sale, the financial institution would be “ better positioned to deliver greater value to the organization and its stakeholders, as well as continue to build the future of banking in Nigeria.” The bank has therefore resorted to diversify its subsidiary in the UK to maximize its network of over 300 Sales and Service Centres across Nigeria.
Also commenting on the sale, Mohammed Iqbal, Founder and CEO of MBU Capital, disclosed that the investment firm “sees a huge opportunity to build on UBUK’s strengths in international markets and create a new-style bank which is focused on the needs of UK and international SMEs and entrepreneurs.” Iqbal elaborated on the fact that many customers are seeking a bank which truly understands the needs of entrepreneurial, fast-growing businesses.
“We believe that our acquisition and vision for UBUK offers the potential for significant growth for the bank,” Iqbal said. This growth will, however, be actualized through meeting the needs of entrepreneurial customers.
Both CEOs affirmed that UBUK’s existing management will still be in place to deliver a stronger and more profitable entity, whilst sustaining and intensifying relationships with existing customers and trade partners.
Union Bank released its unaudited financial statements for the period ended September 30, 2019, demonstrating numerous positive figures across financial indicators. The bank recorded a profit of N15.19 billion for the nine-month period of 2019, which in comparison to the N14.66 billion recorded in 2018 represents a 3.6 percent increase in profit after tax.