In compliance with the Central Bank of Nigeria’s Regulation on the Scope of Banking Activities and Ancillary Matters, shareholders of United Bank for Africa on Thursday approved the restructuring of the bank.
The shareholders gave the endorsement at a court-ordered meeting between the bank and holders of its fully paid ordinary shares with regards to the proposed restructuring of the bank.
At the meeting held at Harbour Point, Victoria Island, Lagos, the shareholders had unanimously adopted a motion by the Chairman of the bank, Chief Israel Ogbue, for the adoption of a commercial banking structure, which will see the bank divest all non-commercial banking businesses of the group.
Under the new structure, the divested non-commercial banking businesses (except Africa Prudential Registrars and Afriland Properties that will be held directly by shareholders) will be consolidated within UBA Capital Plc, which is one of the bank’s subsidiaries.
Apart from UBA Plc, the restructuring will therefore result in the emergence of four separate standalone companies namely, UBA Plc, UBA Capital Plc, African Prudential Registrars Plc and African Properties Plc.
According to Ogbue, the new structure will, among other benefits, enhance UBA’s corporate governance practices as there will be dedicated board and management focus on the core business of commercial banking. He added that it would ensure the protection of shareholder value.
Ogbue assured the shareholders that care had been taken to ensure that the potential concerns of all stakeholders were addressed.
He said, “The proposed restructuring of the Group will ensure significant enhancement of portfolio optimisation, coordination and reduction of risks and duplications across the different businesses.
“Shareholders will remain the end beneficiaries of inherent/future value existing in viable subsidiaries that operate in industries with strong underlying fundamentals and that have demonstrated sustainable growth and profitability profiles.”
For his part, the Group Managing Director of the Bank, Mr. Phillips Oduoza, said the commercial banking structure would create more value for shareholders.
Explaining the new arrangement further, he said, “Both UBA Capital Plc and Africa Prudential Registrars Plc will be listed companies on the NSE on day 1; hence, eligible shareholders will have the benefit of owning liquid stocks in those entities while Afriland Properties will be listed at a much future date.”
He added that Africa Prudential Registrars Plc and Afriland Properties would be spun-off to the eligible shareholders in line with the CBN’s directive to banks to divest from such businesses.
“Capital market valuations of post-restructure entities will likely reveal an unlocking of value as investors will gain a deeper understanding of spun off entities currently within the UBA Group. We believe that this will drive operational efficiency, support our growth strategies and be a significant driver of value to all stakeholders,” he explained.