By Dipo Olowookere
An approval for the listing of the N30 billion corporate bonds issued by Union Bank of Nigeria on the Nigerian Stock Exchange (NSE) has been granted.
Business Post gathered that the authorization was given by the exchange to the financial institution on Friday, August 23, 2019, according to a regulatory document seen over the weekend.
During a recent analyst call, the mid-level financial institution had confirmed that it sold bonds worth N30 billion to investors in a bid to raise funds to run its operations, adding that the exercise recorded a 100 percent success rate.
The N30 billion series 3 subordinated unsecured fixed rate notes were offered to subscribers at 16.2 percent and it was learned that the exercise was conducted and given at such high rate as a result of recent decline in yields of local bonds.
The series 3 bonds due in 2029 were offered to investors under the N100 billion debt issuance programme of the financial institution, which is repositioning itself to compete with the ‘big boys’ in the industry.
Business Post learned that after the exercise Union Bank’s stockbroker, United Capital Securities Limited, applied for the trading of the debt instrument on the floor of the exchange.
It was further gathered that Standard Chartered Capital and Advisory Nigeria Limited; Chapel Hill Denham; Renaissance Securities Limited; and Union Capital Markets Limited were the issuing houses for the exercise.
In the first half of this year, Union Bank improved the number of its active customers to 4.9 million from 4.3 million in the same period of 2018. This was buoyed by its intensified pursuit for quality customers and deepening relationship with existing customers.
During the period, the company diversified its loan book by increasing lending to retail by 8 percent from 6.9 percent in the 2018 financial year. The lender also increased its lending to the information and communication sector to 8.9 percent in H1 2018 from 3.2 percent in FY 2018, while lending to the oil and gas sector was reduced to 34.6 percent from 38.2 percent.
Though the gross earnings in H1 2019 reduced by 9 percent to N76 billion from N83.3 billion in H1 2018, the profit before tax went up by 4 percent to N12.1 billion from N11.7 billion, with the loan to deposit growing to 63.3 percent from 60.6 percent.
