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Union Bank set to acquire seven banks

Posted by By Esan Sunday, Snr Finance Correspondent, Lagos on 2005/04/21 | Views: 343 |

Union Bank set to acquire seven banks


One of the biggest financial institutions in the country and the most capitalised, Union Bank, will further enlarge its coast on Tuesday when it acquires seven banks; to the appreciation of the Central Bank of Nigeria (CBN).

One of the biggest financial institutions in the country and the most capitalised, Union Bank, will further enlarge its coast on Tuesday when it acquires seven banks; to the appreciation of the Central Bank of Nigeria (CBN).


The signing of the Memorandum of Understanding (MOU) between it and the seven would be done at its head office at 10:00 a.m.


Among those being bought are Gulf Bank, Marina Bank and Broad Bank.


Seventeen banks initially sought to merge with Union Bank, but the number was trimmed down to 12. Five were knocked out in the last minute.


Union Bank is said to have conducted a due diligence on the seven and found them worthy to be part of its group, now angling to become the biggest bank in Africa.


It is working towards a capital base of N150 billion.


Aside its capital base and that of the seven, Union Bank plans to raise about N100 billion from the capital market through both public offer and right issues.


CBN Governor, Charles Soludo, at a meeting with select bank chiefs in Lagos last month, mandated Union Bank to name outfits it hopes to acquire, based on the information that most of the banks want to be part of it.


He urged those of the 11 which have met the N25 billion capital base requirement to acquire smaller banks for the consolidation exercise to achieve its purpose.


Meanwhile, the CBN in the revised consolidation guidelines stated that banks that fail to secure final merging approval from it by the end of October would cease to operate.


It outlined three stages for serious minded banks: Pre-merger consent should be sought from and given by it by April 2005; approval in principle be got by August 2005 and final approval by October 2005.


The banks are expected to submit to CBN Director of Banking Supervision, Ignatius Imala, monthly returns of their consolidation activities, at least five days after the end of each reporting month, starting from April.

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Fay(Katy, Texas, US)says...

Actually translates to bravehearted.