Observers React to Potential Zenith Bank, Union Bank Merger


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.”

Related Stories

Stanbic IBTC Bank Honoured for Supporting Women-Owned Businesses

By Modupe Gbadeyanka Stanbic IBTC Bank Limited has been recognised as the Most Outstanding Bank Supporting Women-Owned Businesses at the Women in Marketing and Communications Award (WIMCA) held in Lagos. The organisers of the event said the subsidiary of Stanbic IBTC Holdings has been very supportive of businesses owned by females in the society. The lender has created a healthy environment that breaks down barriers for talented, qualified women to achieve their career aspirations, own their businesses, and make demonstrable differences in their various industries. The Head of Enterprise Banking at Stanbic IBTC Bank, Ms Olajumoke Bello, while receiving the


US Issues Klasha Money Services Business Licence

By Adedapo Adesanya Klasha, a leading global cross-border payments company, has been granted a Money Services Business (MSB) license by the Financial Crimes Enforcement Network (FinCEN) to operate in the world’s largest economy, the United States. This license authorizes Klasha to operate as a currency exchange and money transmitter in the US. With this MSB license, Klasha can now offer its innovative cross-border payment solutions and financial services to businesses in the United States that want to send and accept cross-border payments from Africa and carry out foreign exchange services and international money transfers with ease and security. “We are


Stanbic IBTC Capital Shines at AIHN Awards

By Modupe Gbadeyanka Like a golden fish, which has no hiding place, Stanbic IBTC Capital, the investment banking subsidiary of Stanbic IBTC Holdings, was the cynosure of all eyes at the recently concluded Association of Issuing Houses of Nigeria (AIHN) Investment Banking Dinner and Awards ceremony. At the event held in Lagos, the company went home with five awards, named as the Best Investment Bank in Nigeria, the Equity Deal of 2022, the Best Equity House of 2022, the Best Corporate Bond House 2022 and the M&A Deal of the Year 2022. The recognitions spread across Stanbic IBTC Capital’s Advisory,


Agropreneurs, Others Get N10m Grant from Unity Bank Corpreneurship Challenge

By Modupe Gbadeyanka A business grant of N10 million has been given to 30 members of the National Youth Service Corps (NYSC), who partook in the entrepreneurship development initiative of Unity Bank Plc known as the Corpreneurship Challenge. The young entrepreneurs received funding support for developing innovative solutions in several business value chains like honey production, rice, and snail farming, among others. The beneficiaries pitched their business ideas to judges selected for the competition across 10 state NYSC Orientation Camps; Katsina, Kano, Kwara, Imo, Rivers, Delta, Sokoto, Edo, Akwa-Ibom, and Osun States. At the NYSC Orientation camp at Ikot Itie

More Stories

UN Says 1m Somali Refugees Grow Hopeless

By Dipo Olowookere More than one million Somali refugees who have been displaced from their homes for decades are becoming despondent as they continue to be unable to return home and donor support is growing fatigued, according to the United Nations refugee agency. “There is a growing sense of helplessness in the camps because people are feeling forgotten,” said Mohamed Abdi Affey, the Special Envoy to the Somali refugee situation for the UN Office of the High Commissioner for Refugees (UNHCR). The Somali refugee crisis is one of the longest-running in the world, with people who have been displaced for


Mouka Dangles N1m Bedroom Makeover Before Nigerians

By Aduragbemi Omiyale Nigerians have the opportunity to have their bedrooms transformed with N1 million in a new campaign introduced by Mouka, the country’s leading brand of mattresses and pillows. The bedroom makeover promo tagged Get the Mouka for You aims to encourage consumers to buy the right Mouka mattress based on their unique needs. It also seeks to educate consumers about the need to consider their age, body build, lifestyle and budget before choosing the right Mouka mattress. The campaign also features the leading associations in the bedding industry, the Nigeria Society of Physiotherapy (NSP) and the National Association


FSDH Expects CBN to Hold Rates at 14% after MPC Meeting

By Modupe Gbadeyanka/FSDH Research The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has entered its day two, which is the last day and after the meeting, the CBN Governor, Mr Godwin Emefiele, is expected to address the media on outcome of their deliberations. But ahead of that, FSDH Research has disclosed that it expects the committee to hold the rates at the current levels of 14 percent. In the past, there have been calls for reduction in the rates, including from the Minister of Finance, Mrs Kemi Adeosun and the Manufacturers Association of Nigeria (NAN), but


Nigeria Sold $504m Crude Oil, Gas in November 2019—NNPC

By Adedapo Adesanya The Nigerian National Petroleum Corporation (NNPC) has disclosed that an export sale of crude oil and gas of $504.44 million was recorded in November 2019; indicating an increase of 4.39 percent compared with the previous month. According to the national oil company, Crude oil export sales contributed $383.89 million (76.10 percent) of the dollar transactions compared with $396.94 million contribution in the previous month; while the export gas sales amounted to $120.55 million in the month under review. This was disclosed by Mr Sam Makoji, the NNPC Acting Group General Manager, Group Public Affairs Division in a


FG Gets $750m World Bank Loan for COVID-19 Recovery

By Adedapo Adesanya The federal government has confirmed the receipt of a $750 million World Bank loan as an intervention towards helping Nigerians quickly recover from the effect of coronavirus disease (COVID-19). This was disclosed by the Minister of State for Finance, Budget and National Planning, Mr Clem Agba, at the appraisal meeting of the proposed Nigeria Cares (N-CARES) programme organised by the Community and Social Development Project (CSDP), an initiative of the federal government. He urged states to leverage on both the N560 billion and N462 billion available for MSMEs and Agriculture sectors to mitigate the effect of coronavirus


Oil Prices Rise as Iran Seizes British Oil Tanker

By Adedapo Adesanya Crude oil prices increased on the global oil market on Friday as listed oil markets recorded slight increases in prices of the black gold. The rise in the price of the prized commodity was attributed to the seizure of a British oil vessel by the Iranian authorities, sparking another round of tensions after the country’s forces were accused recently of attacking an oil vessel. At the market on Friday, the West Texas International (WTI) crude, which saw a drop in the previous day, recorded a 0.61 percent increase to sell at an equivalent of $56 per barrel.


GH Capital Mulls Bitcoin Credit Card Payment System

By Dipo Olowookere A diversified FinTech holding company, GH Capital, has announced the intention of its online payment service subsidiary, ClickDirectPay, to actively exploring the concept of utilizing blockchain capabilities as part of its core offering, providing a financial platform that is universally accessible, regardless of country or currency. As the popularity and growing demand for cryptocurrency increases, organizations offering payments and acquiring solutions will also gradually produce alternative solutions and approaches. Chief Executive Officer of GH Capital, Mr Wolfgang Ruecker, stated that, “ClickDirectPay is looking to extend its reach of serviceability on a global scale. “Currently, ClickDirectPay is only


NGX All-Share Index Soars Above 66000 points on Strong Investor Sentiment

By Dipo Olowookere Renewed appetite for local stocks raised the All-Share Index (ASI) of the Nigerian Exchange (NGX) Limited above 66,000 points on Monday. Business Post reports that investor sentiment was strong yesterday, as traders cherry-picked equities across the major sectors of the domestic bourse. This elevated Customs Street by 0.90 per cent at the close of transactions, as the confidence of investors in the market is gradually building up again. Consequently, the benchmark performance indicator increased by 592.47 points to 66,151.38 points from 65,558.91 points, and the market capitalisation grew by N324 billion to N36.205 trillion from N35.881 trillion.

Recent Stories

How COP28 Aims to Unlock Trillions for Climate Solutions by Centering Business

By Badr Jafar Over 70,000 individuals from around the world are about to converge on Dubai to participate in COP28. In the lead-up, the UAE’s COP28 Presidency has made no secret of its ambition to make this the most inclusive and consequential COP ever. While much of that effort has elevated historically underrepresented communities, and rightly so, a lesser-known determination of the COP28 Presidency is about transforming how the COP process engages with the private sector. From 1-2 December this year, COP28 will feature the biggest gathering of business and philanthropy devoted to solving climate change in history, at the


Chappal Acquires Agbami Oil Field from Equinor

By Adedapo Adesanya Equinor and Chappal Energies have entered into an agreement for the sale of Equinor Nigeria Energy Company (ENEC), which holds a 53.85 per cent ownership in oil and gas lease OML 128, including the unitized 20.21 per cent stake in the Agbami oil field, operated by Chevron. Speaking on the deal, Equinor’s senior vice president for Africa Operations, Ms Nina Koch, said Nigeria has been an important part of Equinor’s international portfolio over the past 30 years, noting that, “This transaction realizes value and is in line with Equinor’s strategy to optimize its international oil and gas


Yuletide: Emirates Gives Air Travel Guidance to Passengers

By Modupe Gbadeyanka Customers of Emirates Airlines have been advised to plan their travel carefully this December, as departure numbers peak throughout the festive month, including over the UAE National Day and Christmas period. In a statement, the airline operator urged passengers to arrive at the airport up to 3 hours before a flight and take note of their boarding time to ensure they reach the departure gate on time. It noted that travellers could take advantage of a wide array of check-in and baggage drop options from Emirates City Check-In & Travel Store, to newly refurbished First and Business


We Constantly Seek Opportunities in Payments Ecosystem—Interswitch

By Aduragbemi Omiyale The Managing Director of Payment Processing & Switching at Interswitch Purepay, Mr Akeem Lawal, has said the company will always throw its full weight behind conversations aimed at improving the payments industry. Mr Lawal said this ahead of the 2023 annual conference of the Committee of e-Business Industry Heads (CeBIH) scheduled to take place from Tuesday, December 5, 2023, to Wednesday, December 6, 2023, in Lagos. He is one of the speakers slated to attend the event with the Managing Director of Verve International, Vincent Ogbunude; and the Managing Director of Digital Infrastructure and Managed Services at


Why Environmental Injustice Flourishes In Nigeria

By Jerome-Mario Utomi Recently, precisely on Tuesday, November 21, 2023, I participated as a panellist at the Institute for Housing and Urban Development Studies (IHS), Erasmus University, Rotterdam, Netherlands, a panel discussion on The role of multi-stakeholder engagement in achieving environmental justice. The gathering, which was held in Victoria Island, Lagos, formed part of training on Environmental Justice: Reducing Ecological and Social Inequalities through Effective and Participatory Land Governance. Essentially, in my private study/preparation for the programme, the need to domesticate the subject became paramount to me. To achieve this objective; the following questions came flooding; what is environmental justice?


NAICOM Asks Insurance Companies to Tackle Unpaid Claims

By Adedapo Adesanya The boards of insurance companies operating in the country have been charged by the National Insurance Commission (NAICOM) to embrace the measures put in place to tackle the challenges of unpaid claims. The Commissioner for Insurance, Mr Sunday Thomas, expressed worry over the number of outstanding claims in the sector despite efforts by the regulator to address the issue. Mr Thomas, who is also the chief executive of NAICOM, said the organisation, in collaboration with members of the Insurers’ Committee, has taken decisions and incepted measures designed to tame the menace of unpaid claims. Speaking at the


House of Reps to Halt IOCs from Selling Oil Assets

By Adedapo Adesanya The House of Representatives has pledged to stop international oil companies (IOCs) operating in the Niger Delta from divestment of their offshore assets without being accountable to the environment. The Chairman of the House of Reps Committee on Host Communities, Mr Dumnamene Dekor, said this during a technical session on the implementation of the Host Communities Development Trusts (HCDT), organised by Spaces for Change (S4C) with support from Ford Foundation. Mr Dekor raised the alarm that since the passage of the Petroleum Industry Act in 2021, host communities have not experienced any positive change, rather have remained


Fidelity Bank Signs UN Principles for Responsible Banking

By Modupe Gbadeyanka A Nigerian lender, Fidelity Bank Plc, has agreed to adopt the single framework for a sustainable banking industry developed through collaboration between banks worldwide and the United Nations Environment Programme Finance Initiative (UNEP FI). Called the UN Principles for Responsible Banking (PRB), the initiative is a structure for ensuring that banks’ strategy and practices align with the vision society has set out for its future in the UN Sustainable Development Goals and the Paris Climate Agreement. Banks which have signed the principles commit to being ambitious in their sustainability strategies, working to mainstream and embed sustainability into


Morayo Afolabi-Brown Becomes TVC Entertainment Managing Director

By Modupe Gbadeyanka A popular talk show host, Mrs Morayo Afolabi-Brown, has been appointed as the Managing Director of TVC Entertainment (TVCe). The channel is the entertainment subsidiary of the Lagos-based broadcast media platform, TVC Communications. Mrs Afolabi-Brown is the co-anchor of the famous morning show on TVC, Your View, which has won several awards. Confirming her appointment on Thursday, she said, “I am excitingly pleased to announce my recent appointment as the Managing Director of TVCe, the Entertainment Channel of TVC Communications. “This is a new chapter in my career. I am exceedingly grateful to the board for entrusting


Tinubu Eyes Macroeconomic Stability, Better Investment Environment With 2024 Budget

By Aduragbemi Omiyale President Bola Tinubu has said the 2024 budget presented to the joint session of the National Assembly on Wednesday was designed to achieve macroeconomic stability, a better investment environment, greater access to social security, poverty reduction and enhanced human capital development. According to him, if these goals are achieved, the standard of living of Nigerians will improve and the citizens will enjoy the dividends of democracy. While presenting the 2024 Appropriation Bills to the parliament yesterday, the President said this was why he christened the budget proposal as the Budget of Renewed Hope. Mr Tinubu told the