Union bank

Titan Trust Bank completes takeover of Union Bank

TitanTrust Bank Limited has reached the agreement to acquire a majority stake in Nigeria’s second-oldest lender, Union Bank of Nigeria, the latter said in a regulatory filing, almost six months after an agreement was achieved by both parties.

The lender, backed by a former Deputy Governor of the Central Bank of Nigeria, Tunde Lemo, has moved to acquire an 89.4% stake in Union Bank from a pool of holdings from major exiting investors, including Atlas Mara, based in the British Virgin Islands, and Union Global Partners. Limited, but later increased participation to 93.4 percent.

Although no mention is made of it in the press release seen by PREMIUM TIMES, a name change could follow.

“With the completion of the transaction, TGI Group, parent company of TTB, now becomes the majority shareholder and lead investor in Union Bank,” the document said.

The transfer of ownership excludes Union Bank UK, a subsidiary of Union Bank of Nigeria, which was also sold, with the proceeds of sale to all shareholders of the latter effective March 4, 2022.

In the spirit of the change in ownership, ten of Union Bank’s thirteen board members left the bank including CEO Emeka Okonkwo, who spent barely a year at the helm and Chairwoman, Beatrice Hamza Bassey .

The three people who survived the earthquake are Omolola Cardoso and Joseph Mbulu (both executive directors) as well as Aisha Abubakar, an independent non-executive director.

“Earlier today, we achieved an important milestone with the completion, after regulatory approval, of the landmark transaction announced in December 2021 between the Bank’s major shareholders and Titan Trust Bank,” Ms. Bassey said.

“As is normal for transactions like this, the current Board and CEO, Mr. Emeka Okonkwo, has retired and handed over the reins of the Bank to a new Board and Mr. Mudassir Amray as CEO,” she added.

Union Bank set foot in Nigeria in 1917 as a local unit of British-owned Barclays Bank, with the first branches in Lagos, Jos and Port Harcourt. It remained as Barclays Bank of Nigeria for a long time until local investors bought a 40% stake, changing the name to Union Bank.

Titan Trust Bank, which has long positioned itself as a challenger bank, gave its approval in principle in December to acquire around nine-tenths of the shares of Union Bank, a shock reverse takeover this would likely become the biggest acquisition deal in the Nigerian M&A market of the year.

The lender has revealed a big ambition to become a Tier 1 bank within the next five years and is banking on its massive digital banking power, to disrupt a space where the big five banks commonly known by their initials FUGAZ dominate.

The acquisition eases the path for Titan Trust Bank to become Nigeria’s sixth largest lender, with Union Bank’s assets climbing in valuation to N2.6 trillion by the end of 2021 and Titan’s value to N136 billion. naira in December 2020.

Titan Trust Bank CEO Mudassir Amray told Bloomberg in an interview last month that his bank was focusing on promising big industries like agriculture first, while consolidating its plan to look to new markets. in Africa. It is also looking to diversify into general financial services to drive growth.

But the new bank will face daunting legacy challenges early on in the transformation of Union Bank, which nearly went bankrupt due to the huge volume of bad loans on its books during the 2008-2009 financial crisis, and A regulator’s audit has indicted its CEO Barth Ebong for fraud, including issuing loans worth N40 billion without collateral.

The bank could face an avalanche of legacy debt from legal actions against Union Bank, which the financial report said “resulted in contingent liabilities amounting to ₦1.98 trillion as of December 31, 2021. “.

Auditor Ernst & Young noted that the figure rose to 7.13 trillion naira a year earlier.

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