Shareholders of Union Bank of Nigeria Plc have approved the proposed reduction of ₦54.4 billion from the bank’s share premium account in a bid to restructure its balance sheet for optimal performance.
The shareholders endorsed the move during the bank’s Extra-Ordinary General Meeting (EGM) which held recently in Lagos.
The bank’s financial position as at December 31, 2018 indicated a deficit of ₦54.458bn, representing accumulated permanent losses from legacy transactions. In a bid to offset the negative retained earnings, the bank’s board of directors proposed the share premium reduction in accordance with sections 106 and 107 of Companies and Allied Matters Act (CAMA).
The transaction which is subject to confirmation by the Federal High Court, it will have no impact on the bank’s creditors or its shareholders’ funds but instead, is expected to pave way for the payment of dividends to shareholders.
Chairman of the board of directors, Mr. Cyril Odu, highlighted the bank’s focus on delivering value to its stakeholders. He said: “Union Bank is on course towards delivering its 2019-2021 strategic objectives. As we continue our push towards being Nigeria’s most reliable and trusted banking partner, we remain focused on improving the profitability of our business and delivering value to all our stakeholders – shareholders, customers, business partners and employees.”
Following the successful execution of the bank’s debut local currency bond issued to raise N13.5bn and the tightening up of its loan portfolio, Union Bank remains well positioned to continue executing key business priorities in 2019 and beyond.
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