Banking
Union Bank to Grow Retail Customer Base Despite N5.9tr Legal Battle
By Dipo Olowookere
Tier-2 lender, Union Bank of Nigeria, has expressed its desire to focus more on improving its retail customer base as it forges ahead in the year.
Managing Director of the financial institution, Mr Emeka Emuwa, while speaking at the firm’s 49th Annual General Meeting (AGM) at the International Conference Centre (ICC), Abuja on Tuesday, disclosed that Union Bank was now in pole position to execute its growth agenda from 2018 onwards.
According to him, “Strengthening our capital base through the Rights Issue was key for the bank in 2017.
“Notwithstanding the challenges a tightened economy presented, the rights issue was 20 percent oversubscribed.”
He attributed this overwhelming success to “strong shareholder and investor confidence in Union Bank’s immediate and longer-term plans.”
The bank chief said, “With sufficient capital buffers, we are now in pole position to execute our growth agenda from 2018 onwards.”
“Operationally, we continued to focus on growing our retail customer base and optimising customer experience with simpler, smarter banking solutions,” he added.
“We launched an upgraded suite of digital channels including UnionMobile, UnionOnline and our unique USSD banking code *826#, driving an increase in active subscribers above 100 percent on the mobile app and online banking platforms.
“Union Bank’s alternative banking platform remains the fastest growing in the industry. We continue to attract broad segments of new customers, adding 90 percent more new-to bank customers in 2017 compared to 2016,” Mr Emuwa said further.
A breakdown of Union Bank’s results for the 2017 financial year showed that the lender reported a profit before tax (PBT) of N15.5 billion and a profit after tax of N14.6 billion.
The bank also achieved gross earnings of N163.8 billion with the operating expenses increasing to N65.1 billion from N62 billion in 2016 due to inflationary pressures and the impact of devaluation on technology and network investments.
Furthermore, interest income grew by 25 percent to N124.5 billion from N99.7 billion in 2016, as a result of the impact of Naira devaluation on the foreign currency denominated loan book, government securities yields and loan book repricing.
Non-interest revenue also moved up by 31 percent to N39.3 billon from N29.9 billion in 2016, driven by improved fee and commission income, trading income and a more effective debt recovery machine.
In addition, gross loans grew by five percent to N560.7 billion compared with N535.8 billion in 2016, while customer deposits rose by 22 percent to N802.4 billion from N658.4 billion in 2016, continuing its upward trajectory since 2016.
The growth was led by investments in customer-led products, recently upgraded alternate channels, along with a strengthened brand.
Union Bank’s annual report showed that the bank has a non-performing loan ratio of 19.78 percent of a total N517.1 billion at the end of the financial year under review.
Meanwhile, Chairman of Union Bank, Mr Cyril Odu, who presented the financial institution’s report to shareholders, said the lender was involved in 850 litigation cases with the amount claimed to total N220.26 billion.
However, he added that the total amount claimed in cases instituted by Union Bank in court amounted to N77.17 billion.
According to him, “A total provision of N2.98 billion has been made based on the advice of professional legal counsel.”
In its financial statements, Union Bank said, “There are three cases with total claim of N5.921 trillion of which judgement was awarded against the Bank in conjunction with other parties and provisions were not recognised in the financial statements.
“Management is of the view that a high level of success is expected at the Court of Appeal based on professional legal advice and that the likelihood of outflow of economic resource is considered remote.
“The Directors are of the opinion that none of the aforementioned cases is likely to have a material adverse effect on the Bank and are not aware of any other pending or threatened claims and litigations besides those included in the above number.”
By Adedapo Adesanya
Access Bank Plc, the banking subsidiary of Access Holdings Plc, has entered into a binding agreement with South African-based Bidvest Group Limited for the acquisition of 100 per cent equity stake in Bidvest Bank Limited.
The deal for the 24-year-old South African lender is due to be completed in the second half of 2025, upon regulatory approval.
This shows Access Bank’s further expansion plans in line with goals set by its late founder, Mr Herbert Wigwe.
The agreement to acquire 100 percent stake in Bidvest Bank reflects Access Bank’s commitment to strengthening its footprint in South Africa and consolidating on its position as the continent’s gateway to global markets as it seeks to optimise the benefits of recent acquisitions and accelerate its transition towards a greater focus on efficiencies.
Bidvest Bank, founded in 2000 is a niche and profitable South African financial institution providing a diverse range of services, including corporate and business banking solutions and diverse retail banking products.
As of its year ended June 2024, Bidvest Bank reported total assets equivalent of $665million and audited profit before tax of $20million.
Upon conclusion of this acquisition, Bidvest Bank will be merged with the bank’s existing South African subsidiary to create an enlarged platform to anchor the regional growth strategy for the SADC region.
This is coming just as the bank opened a new branch in Malta as part of efforts to focus on international trade finance after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
The Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
By Modupe Gbadeyanka
To strengthen Europe-Africa trade ties, Access Bank has opened a new branch in Malta. It will focus on international trade finance, employing approximately 30 people in its initial phase, with plans for controlled expansion over time.
It was learned that this Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
Access Bank Malta Limited commenced operations after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
Malta, a renowned international financial centre, and a gateway between the two continents, is strategically positioned to play a pivotal role in advancing commerce and fostering economic partnerships.
This strategic expansion into Malta enables The Access Bank UK Limited to leverage growing trade opportunities between Europe and Africa.
It underscores the organisation’s commitment to driving global trade, financial integration, and supporting businesses across these regions.
“By establishing operations in Malta, we will gain a foothold in a market that bridges European and North African economies, moving us one step closer to our goal of becoming Africa’s Gateway to the World.
“It further enhances our bank’s capacity to support clients with innovative solutions tailored to cross-border trade and investment opportunities,” the chief executive of Access Bank, Mr Roosevelt Ogbonna, stated.
“Europe has emerged as Africa’s leading trading partner, driven by initiatives such as the Economic Partnership Agreements between the EU and African regions and the African Continental Free Trade Area (AfCFTA).
“With Europe-Africa economic relations entering a new phase, The Access Bank Malta Limited is ideally positioned to deepen trade and meet the financing and banking needs of our clients in these expanding markets,” the chief executive of Access Bank UK, Mr Jamie Simmonds, commented.
Also speaking, the chief executive of Access Bank Malta, Renald Theuma, said, “Malta is uniquely positioned as a bridge between Europe and Africa, making it an ideal location for our subsidiary. This move allows The Access Bank Malta Limited to engage more closely with customers in Europe and deliver tailored financial solutions that drive growth and connectivity across both continents.”
By Adedapo Adesanya
The International Finance Corporation (IFC) and Goldman Sachs have announced a new partnership with African banks, including Nigeria’s Zenith Bank and Stanbic IBTC Nigeria to support the Goldman Sachs 10,000 Women initiative, a joint programme launched in 2008 to provide access to capital and training for women entrepreneurs globally.
The two Nigerian banks are part of nine financial institutions from across Africa which have agreed to join the 10,000 Women initiative committing to leverage the business education and skills tools the programme provides to create more opportunities for women entrepreneurs across the continent by providing access to business education.
Others banks include Stanbic Bank Kenya, Ecobank Kenya, Ecobank Cote d’Ivoire, Equity Bank Group, Banco Millenium Atlantico – Angola, Baobab Group, and Orange Bank.
Speaking on this, Ms Charlotte Keenan, Managing Director at Goldman Sachs said – “10,000 Women has had a powerful impact to date, but we know that there are more women to reach and more potential to be realized.
“We are delighted to partner with IFC to supercharge the growth of women-owned businesses across Africa, and mainstream lending to female business leaders. We remain committed to supporting entrepreneurs with the access to education and capital that they need to scale.”
Since 2008, the 10,000 Women initiative has provided access to capital and business training to more than 200,000 women in 150 countries.
“This expanded initiative marks a significant step forward in creating equitable economic opportunities for women in Africa, enabling them to build stronger, more resilient businesses and to realize their entrepreneurial goals,” said Ms Nathalie Kouassi Akon, IFC’s Global Director for Gender and Economic Inclusion.
Goldman Sachs’ 10,000 Women initiative complements the Women Entrepreneurs Opportunity Facility (WEOF), launched in 2014 by Goldman Sachs and IFC as the first-of-its-kind global facility dedicated to expanding access to capital for women entrepreneurs in emerging markets.
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