Peter Egwuatu
27 November 2008
Union Bank of Nigeria (ubn) Plc, yesterday, assured shareholders that there will be no hostile takeover by foreign investors through its proposal to raise additional capital by offering 4.053 billion ordinary shares of the company by way of placement to strategic investors.
Group Managing Director/Chief Executive Officer of the bank, Dr. Barth Ebong, while speaking at the bank's 39th Annual General Meeting, said there was no need to fear any hostile takeover, adding: "We assure you that all is safe."
He said the approved dividend of N1.00, when combined with the bonus issue of one for six gives one of the highest returns in the industry.
This, he noted, was imperative owing to the bank's tradition of growing shareholders' value, as it had consistently paid dividend and had given bonus to its shareholders on an annual basis since its privatisation in 1993.
He added that with a return of 22.25 per cent on shareholders' fund, this had made its share one of the most profitable and rewarding investments in the Nigerian banking sector.
Explaining the bank's financial performance, Oboh said despite the challenges in the operating environment, the bank recorded impressive result for the year as gross earnings increased by 30.73 per cent from N71.09bn in 2007 to N92.935bn as at March 31, 2008.
"The bank's profit after tax more than doubled increasing by 104 per cent from N12.126bn in the preceding year to N24.73bn in 2008. The bank with a shareholders' fund of N111.27bn had its total asset growing by 46.3 per cent from N619.80bn to N907.074bn," he said.
Ebong further explained that a number of initiatives had been taken by the Board of Directors to reposition it and enhance its competitive position in terms of structure, processes and procedures.
This, according to him, included the development of a corporate strategic plan and the creation of 18 additional Business Development Centres, bringing the total number to 41 from 23 the previous financial year.
Chairman of the bank, Prof. Musa Gella Yakubu, while speaking on the possibility of raising additional fund from the capital market said, "At the extra-ordinary general meeting held in 2007 in Kano, we were mandated by our shareholders to raise additional capital through public offer and rights issue. The objective was to enable us finance big transactions and be a more active player in sectors like oil and gas, energy, infrastructural and telecommunications.
"We are in the process of seeking approval of the regulatory authorities for the offers before the recent downturn in the capital market began. Consequently, we had to step down the machinery for the capital raising exercise. Once we get the appropriate signals, we would proceed with the offers," he said.
The shareholders at the Annual General Meeting (AGM) approved the proposed dividend payment of N11.582bn for the 2008 financial year.
They also approved a bonus dividend of one for every six shares held by them. These were earlier proposed by the bank's board of directors.
The dividend of N11.582bn, which translated into N1.00 per 50 kobo ordinary share, represented a total dividend pay-out ratio of 46.8 per cent out of the bank's profit for the year under review.
It is also 20 per cent higher than the N9.65bn dividend appropriated in the comparable period of 2007.
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