Shareholders of Union Bank Nigeria Plc wednesday approved five resolutions authorising the board of the bank to raise up to N50 billion through rights issue.
The shareholders gave their approval at an extra-ordinary general meeting (EGM) of the bank held in Lagos. In a bid to accommodate the new shares, the shareholders’ approved the increase of authorised capital of the bank from N9.5 billion (made up of 19 billion ordinary shares) of 50 kobo each to N17.5 billion (made up of 35 billion ordinary shares) of 50 kobo each by the creation of additional of approximately 16 billion ordinary shares of 50 kobo each ranking equally with the existing shares of the bank. Consequently, the memorandum and articles of association of the bank will be amended to reflect the increase in the authorized share capital to N17.5 billion.
Commenting on the development, Chief Executive Officer of Union Bank, Mr. Emeka Emuwa said: “Obtaining shareholder approval for our capital increase is a necessary step bringing us closer to the rights issue. Incremental capital will further strengthen Union Bank’s near-term positioning and enable us realise our long-term growth aspirations.”
According to him, the bank views the approval as a strong sign of shareholders’ support.
“We view the right issue approval as a strong sign of shareholder support for Union Bank’s growth strategy and our plans to scale up operations and strengthen our position in readiness for uptake when the macroeconomic direction changes,” Emuwa said.
While amending the bank’s memorandum of association and the articles of association in order to authorize an increase in the Bank’s share capital required the approval of at least a three-quarter majority of votes present at the EGM. But the issue was supported by shareholders representing together 99.6 per cent of the votes.
Union Bank recently reported a growth of 29 per cent in profit before and after tax for the nine months ended September 30, 2016 in spite of the challenging operating environment.
“We are encouraged by this performance which comes in the face of a recessionary environment, increased impairments and headwinds in our trade business due to scarcity of foreign exchange. Our steady effort to build a low cost, customer centric retail business over the past 18 months is demonstrating results,” the CEO had explained.