Banking

Observers React to Potential Zenith Bank, Union Bank Merger

Published

6 years ago

15/03/2020

By Dipo Olowookere

One information that is gradually gaining momentum in the nation’s stock market is the rumoured acquisition or merger between Zenith Bank Plc and Union Bank of Nigeria Plc.

Both financial institutions are listed on the Nigerian Stock Exchange (NSE) and it is expected that speculations as this will catch the attention of their respective shareholders.

On Saturday, it was rumoured that the Central Bank of Nigeria (CBN) has given Zenith Bank the go ahead to ‘swallow’ Union Bank, one of the oldest lenders in the country.

This came few days after it was reported by a national daily that First Bank, unarguably the oldest bank in Nigeria, was planning to absorb Heritage Bank and Polaris Bank, which used to be Skye Bank.

About 24 hours after this news was reported, FBN Holdings Plc, the parent company of First Bank Nigeria Limited, issued a statement admitting that it was shopping for a bank with value to acquire.

So, when the rumour about Zenith Bank looking to ‘take in’ Union Bank hit the investing community, observers were quick to share their views on the matter, especially when it was speculated that Zenith Bank beat Access Bank to the deal.

Access Bank has before now been linked with Union Bank on possible but both companies refuted that by releasing statements to the NSE.

Recall that it was about this time last year that Access Bank completed its merger with the defunct Diamond Bank then headed by Mr Uzoma Dozie.

That deal also started late 2018 as a rumour, with both banks initially denying the ‘marriage’ vehemently, until its former Chairman, Mr Seyi Bickersteth, hinted that the issue of selling the bank to Access Bank came up at one of its board meetings, but was rejected by a set of members, who were later schemed out of the transactions.

So, when the news of Zenith Bank planning to merger with Union Bank came out yesterday, Business Post reached out to some players in the capital market, including stockbrokers, shareholders of both companies involved, analysts, journalists and others to get their views.

A shareholder of Zenith Bank Plc, Mrs Modupe Adediran, who spoke with Business Post, described the rumoured acquisition of Union Bank as a good one, saying it would bring out more earnings and profits to the financial institution.

“It is a good development. In fact, it is long overdue and I am happy that the management of my company is looking at inorganic growth. You will agree with me that Zenith Bank is a classy bank and loves organic growth. Let’s see how this pans out,” she said.

However, a Lagos-based business journalist, Mr Audu Abubakar, warned that the merger between Zenith Bank and Union Bank could be brutal for shareholders of the former.

“I don’t know why Zenith Bank is going for Union Bank that has only managed to reward its shareholders this year for the first time in over 10 years.

“I just hope this deal will not turn out to hunt Zenith Bank and its shareholders, who have been enjoying steady dividend payment over the years.

“If you remember vividly, Access Bank could not give its shareholders a good dividend for the 2019 financial year largely because of its merger with Diamond Bank last year, which significantly increased its outstanding shares, resulting in the paltry 40 kobo dividend the board proposed to pay,” Mr Abubakar stated.

An investor in the stock market, Mr Emmanuel Ewumi, while giving Business Post his view on the matter, stated that, “I think this is the first acquisition by Zenith Bank. Zenith [Bank] is about the biggest bank in Nigeria based on profitability and asset.

“I think the acquisition of Union Bank, if true, will go a long way in consolidating the position of Zenith Bank in the industry. I want to believe that [the] management has done their homework and due diligence before opting for Union Bank.”

Concluding, Mr Elewunmi stated that the rumoured deal “will be a win-win situation for the shareholders of both Union Bank and Zenith Bank.”

On his part, Mr Oremade Oyedeji of the Radiant Shareholders Group, one of the registered shareholders groups at the capital market, informed us that, “I was surprised when I heard the rumour too. What will be the name of the new entity, Union Bank I suppose?

“I don’t see it a good marriage at all, whether as a merger or takeover. We are going to end up with an over-bloated overhead like Access Bank, with poor return on asset employed.

“I also think we need a legislation for anti-competition and monopoly law in Nigeria.”

A senior official of Veritas Registrars, who asked us not to mention his name because he was authorised to speak on the matter because his company is the registrar of Zenith Bank, informed Business Post that Zenith Bank is considering different options of achieving its growth plan. However, he did not specifically say if the rumour has any iota of truth in it or not.

“What I can tell you is that Zenith Bank seriously considering several options to expand its operations, including acquisition of distressed, but profitable ventures. I know in due time, the bank will officially state its position on the matter,” the source simply told Business Post.

Business Post recalls that in 2019, during an analysts’ call, which we also participated in, the Group Managing Director of Zenith Bank, Mr Ebenezer Onyeagwu, said the bank will not hesitate to acquire any available lender that falls in line with its (Zenith Bank) vision.

“In terms of acquisition, we will continue to grow organically, but if we find anything attractive in the market, that is in line with our strategic imperative, we will look at it.

“But we will not go out inordinately to seek for acquisition, but if we find something that is quite attractive and really fits the kind of profile of the investment that we do, we will consider [it].” Mr Onyeagwu had said at the conference call.

Speaking further, the Zenith Bank chief said, “On the opportunity to acquire any of the retail lender; first is that we will continue to grow organically, that is our primary goal. If we find anything that is strategically relevant and would add reasonable value to us, we will look at it.

“We will not just do acquisition for the sake of doing it, we will do it [because] there is money to be made, there is incremental value, not for cosmetic reasons.”

Banking

Amaka Onwughalu Replaces Chike-Obi as Fidelity Bank Chairman

Published

7 hours ago

03/01/2026

Aduragbemi Omiyale

By Aduragbemi Omiyale

Fidelity Bank Plc now has a new chairman and she is Mrs Amaka Onwughalu, with her appointment taking effect from Thursday, January 1, 2026.

The lender confirmed this in a statement to announce the retirement of Mr Mustafa Chike-Obi from the position effective Wednesday, December 31, 2025.

In the statement, the bank disclosed that the board transitions were in alignment with its policy, with the Central Bank of Nigeria, the Nigerian Exchange (NGX) Limited and other stakeholders notified.

Under Mr Chike-Obi’s leadership, Fidelity Bank repaid its Eurobond, completed the first tranche of its public offer and rights issue that were oversubscribed by 237 per cent and 137.73 per cent, respectively.

The financial institution under his watch expanded internationally to the United Kingdom, and received improved ratings from various agencies amongst a long list of achievements.

His tenure also saw the bank strengthen its capital position, record steady growth in customer deposits and total assets, deepen its digital banking capabilities, and enhance its corporate and investment banking proposition.

The company equally made notable progress in governance, risk management, and operational efficiency, all of which contributed to strengthened market confidence and its sustained upward performance trajectory.

“It has been a privilege to serve as Chairman of Fidelity Bank. The dedication of our board, management, and staff has enabled us to reach significant milestones. I am confident that the bank will continue to thrive and deliver value to all stakeholders,” Mr Chike-Obi reflected of his tenure

Mrs Amaka Onwughalu’s appointment marks a new chapter for Fidelity Bank. She joined the board in December 2020 and has chaired key committees.

With over 30 years of banking experience, including executive roles at Mainstreet Bank Limited and Skye Bank Plc. She holds degrees in Economics, Corporate Governance, and Business Administration, and has attended executive programmes at global institutions.

Mrs Onwughalu is a Fellow of several professional bodies and has received awards for accountability and financial management.

“I am honoured to lead the Board of Fidelity Bank at this exciting time. Our recent achievements have set a strong foundation for continued growth. I look forward to working with my colleagues to drive our strategy and deliver sustainable value,” commented Mrs Onwughalu.

Banking

Nigerians to Pay N50 Stamp Duty On Transfers Above N10,000 From January 1

Published

3 days ago

31/12/2025

Adedapo Adesanya

By Adedapo Adesanya

Nigerians will start paying a N50 stamp duty on all bank related electronic transfers of N10,000 and above from January 1, 2026, following the implementation of the Tax Act.

The stamp duty or electronic money transfer levy (EMTL) is a single, one-off charge of N50 on electronic receipt or transfer of money deposited in any commercial money bank or financial institution on any type of account on sums of N10,000 and above.

Before the new policy, electronic transfers of N10,000 and above attracted a N50 EMTL, but the charge was typically deducted from the receiver’s account.

This was disclosed in notices sent by a series of Nigerian banks to their customers ahead of the policy’s implementation seen by Business Post.

In an email sent to customers on Tuesday, the United Bank for Africa (UBA) said the N50 EMTL on transfers would now be referred to as stamp duty across all financial institutions.

“Please note the following: Stamp Duty applies to transactions of N10,000 and above (or the equivalent in other currencies),” the email reads. Salary payments and Intra-bank self-transfers are exempt from stamp duty. “The Sender now bears the Stamp Duty charge. Previously, this charge was deducted from the Beneficiary/ Receiver.”

Also Access Bank customers received the same notice.

Banks clarified that this charge is separate from regular bank transfer fees and will be clearly disclosed to customers at the point of transaction.

The notice also stated that transfers below N10,000 are exempt from the stamp duty.

In addition, salary payments and intra-bank transfers—transactions between accounts within the same bank—will not attract the N50 charge.

This replaces the previous percentage-based charges, which often created uncertainty around the total cost of documentation.

Banks say the adjustment is aimed at simplifying compliance and making stamp duty charges easier for individuals and businesses to understand upfront.

President Bola Tinubu on Sunday insisted that the implementation of the new tax laws will commence on January 1 as planned, despite criticisms from opposition and pressure groups.

In a statement, President Tinubu said the tax laws are not designed to raise taxes, but rather to support a structural reset, drive harmonisation, and protect dignity while strengthening the social contract.

“The new tax laws, including those that took effect on June 26, 2025, and the remaining acts scheduled to commence on January 1, 2026, will continue as planned,” the president said on Tuesday.

Banking

NDIC Laments Impact of 50% Cost-to-Income Policy on Operations

Published

4 days ago

30/12/2025

Adedapo Adesanya

By Adedapo Adesanya

The Nigeria Deposit Insurance Corporation (NDIC) has warned that the federal government’s 50 per cent cost-to-income ratio policy was limiting its ability to build a strong financial buffer to protect depositors.

The chief executive of the agency, Mr Thompson Sunday, in a statement by the Head of the Communication and Public Affairs Department, Mrs Hawwau Gambo, on Tuesday, said the NDIC complies with the policy but lamented that “the deductions affect NDIC’s ability to build a strong Deposit Insurance Fund, which is needed to respond effectively to bank failures.”

Mr Sunday restated the corporation’s adherence to fiscal and financial regulations, including the Fiscal Responsibility Act 2007, during a courtesy visit to the Managing Director/Chief Executive of the Ministry of Finance Incorporated (MOFI), Mr Armstrong Takang, in Abuja.

According to the statement, Mr Sunday stressed that the NDIC “complies fully with statutory remittance obligations, including the payment of 20 per cent of gross earnings or 80 per cent of net surplus to the Federal Government, as applicable,” adding that the corporation also submits its financial statements ahead of statutory deadlines.

The NDIC boss said this commitment to transparency aligns with its role as a key financial safety-net agency responsible for protecting depositors and supporting confidence in the banking system.

However, he cautioned that while the corporation also complies with the Federal Government’s 50 per cent cost-to-income ratio policy, “the policy poses operational constraints.”

He explained that maintaining a robust Deposit Insurance Fund is critical to the NDIC’s ability to respond promptly and effectively to bank failures without depending on government support.

He added that international standards under the Core Principles for Effective Deposit Insurance, issued by the International Association of Deposit Insurers, require deposit insurers to maintain adequate funds for this purpose.

To strengthen its capacity, Sunday said the NDIC is seeking an exemption from the policy.

He described MOFI as a critical stakeholder, noting that the Federal Government, through the agency, holds a 40 per cent equity stake in the NDIC.

According to him, continued collaboration is essential to ensure the NDIC meets its obligations to the government while safeguarding depositors’ funds.

In his remarks, Mr Takang commended the NDIC’s spirit of collaboration and its compliance with fiscal regulations.

He assured that MOFI would continue to engage the Federal Ministry of Finance on the NDIC’s behalf, adding that a strong NDIC is vital to maintaining confidence in the financial system.

Both institutions reaffirmed their commitment to cooperation, transparency and accountability.

The federal government’s 50 per cent cost-to-income ratio policy was introduced through a circular dated December 28, 2023, signed by the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun.

The circular directed federal agencies and parastatals to remit 50 per cent of their internally generated revenue to the Treasury Single Account as part of broader presidential fiscal directives.

The directive, to be implemented by the Office of the Accountant-General of the Federation in early January 2024, builds on existing rules for IGR remittances under the Fiscal Responsibility Act and related circulars, with the aim of improving revenue mobilisation and fiscal discipline across Ministries, Departments and Agencies (MDAs).