Shareholders endorse Union Bank’s N247.87bn deficit write-off

Union bank Plc shareholders at the company’s 48th Annual General Meeting (AGM) in Lagos Wednesday endorsed resolution by the board to write of its N247.67 billion, from its N391.64 billion share premium credit.

The write off which is subject to approval of the Federal High Court, would be executed by the board, also empowered by the shareholders to execute all documents related to the exercise as well as to seek confirmation from the court.

According to the special resolution ,shareholders of the bank approved that “subject to the confirmation of the Federal High Court, the sum of N391,641,000,000, standing to the credit of the company’s share premium account, be reduced by the sum of N247,868,000.000 and the proceed of the reduction , special reserves arising from the reduction , be applied in writing off N247,868 ,000.000 on the company’s general reserve as at 31st December 2016.

Union Bank Chairman, Mr. Cyril Odu, in his remark said that Union bank new to bank customers grew by nearly 70 per cent in 2016, as the energized brand is continually gaining market acceptance.

Odu said that with all indications pointing to Nigeria’s recovery in GDP, the bank remains optimistic about identifying growth opportunities in the economy and remained focused on building a business that will endure for the next 100 years and beyond.

He said that the bank’s revenue in 2016 grew by 8 per cent to N126.6 billion, from N117.2 billion in 2015. Profit he said rose by 6 per cent to N15.7 billion in 2016, from N14.9 billion in 2015.

Operating expenses, he said increased by 7 per cent due to significant ongoing investment in technology and infrastructure, coupled with inflationary and devaluation pressures. “Yet our cost to income ratio declined further this year to 66.2 per cent”

He revealed that customers’ deposits rose by 15 per cent to N658.4 billon, from N570.6 billion in 2015. The growth was driven by product offerings, increased market penetration and improved customer uptake.

The Union Bank Chairman lauded the bank’s shareholders for their unwavering support “over the past century and especially in the past decade when we have had to weather challenges and restructure our bank in order to deliver value to you. Without your investment and commitment, we will not be here”

Mr. Emeka Emuwa, Chief Executive Officer, Union Bank in his address said that Union bank has repositioned and committed to deliver stronger value to customers, stakeholders and shareholders adding that the bank is committed to sustaining the tempo by ensuring that liquidity base remains formidable. “To do our best to deliver value to you and build a bank that will endure for the next 100 years” said Emuwa.

Emuwa said that for further consolidate its liquidity , the bank having secured approval to raise fresh N50 billion through rights issue in 2016, “ we plan to move full steam ahead on the right issue expected to raise N50 billon in capital to finance our growth strategy”

According to him, the rights will be launched in between April to June 2017, as the processes have since commend, adding that Union bank will main focus on growing its retail outlets, managing cost, defending loan books and proactively managing risks.