Economy
FIDELITY Bank Plc yesterday declared interim dividend of 10 kobo per share as the bank recorded double-digit growths across key performance indicators in the first half of 2022.
The audited half-year results and dividend recommendation as Fidelity Bank explained the rationale behind its bid to acquire 100 per cent equity stake in Union Bank UK Plc; a spin-off and former subsidiary of Union Bank of Nigeria (UBN) Plc.
The Board of Directors of Fidelity Bank indicated yesterday that shareholders on the register of the bank as at the close of business on September 12, 2022 would receive interim dividend per share of 10 kobo; payable on September 20.
Key extracts of the audited report for the six-month period ended June 30, 2022 showed that gross earnings rose by 37.9 per cent from N112.30 billion in first half 2021 to N154.84 billion in first half 2022.
Profit before tax grew by 21.6 per cent to N25.08 billion in first half 2022 as against N20.6 billion in first half 2021. After taxes, net profit rose by 20.7 per cent from N19.31 billion to N23.31 billion. Earnings per share thus stood at 80 kobo in first half 2022 as against 67 kobo in first half 2021.
The Central Bank of Nigeria (CBN) had given preliminary approval to Fidelity Bank Plc in its bid to acquire 100 per cent equity stake in Union Bank UK.
Fidelity Bank had entered into a binding agreement to acquire 100 per cent in Union Bank UK Plc, a transaction that will make the London-based retail and wholesale banker a subsidiary of a subsidiary of Fidelity Bank.
The transaction is however still subject to the approval of the UK’s Prudential Regulatory Authority (PRA).
Last December, Union Bank’s core investors – Union Global Partners Limited and Atlas Mara – had reached a Share Sale and Purchase Agreement (SSPA) with Titan Trust Bank (TTB) for the sale of 89.39 per cent of Union Bank’s issued share capital. The agreement came a decade after the initial investment by the core investors in 2012.
Consequently, the transaction also triggered the hive-out of Union Bank UK (UBUK) which was approved by shareholders in an extra-ordinary general meeting on March 29, 2022. This allowed Union Bank of Nigeria’s transition from an international to a national focus.
Managing Director, Fidelity Bank Plc, Mrs. Nneka Onyeali-Ikpe said the acquisition aligned with the bank’s strategic plan of expanding its service touchpoints beyond the Nigerian market as well as providing straight-through services that meet and exceed the needs of its growing clients.
“The diverse service bouquet and business model of Union Bank UK offered a compelling strategy and we hope to build on the existing capacity to create a scalable and more sustaining service franchise that will support the wider ecosystem of our trade businesses and diaspora banking services,” Onyeali-Ikpe said.
Union Bank UK commenced operations in London in 1983. Its banking services include personal banking, trade finance, treasury management and structured trade and commodity finance.
The latest agreement is the second attempt to sell the Union Bank UK. Union Bank of Nigeria had in early 2020 entered into a share sale and purchase agreement to divest its 100 per cent equity stake in the UK subsidiary to MBU BidCo Limited (MBU), an acquisition vehicle wholly owned by MBU Capital Limited (MBU Capital). MBU was selected as the preferred bidder after a competitive bidding process. However, the completion of the sale then was subject to regulatory approvals from the relevant regulatory authorities in Nigeria and the UK.
MBU Capital is an investment management firm founded in 2013 and based in Mayfair, London. MBU Capital has active interests in financial services, healthcare, education, real estate and technology. MBU Capital (UK) LLP is authorised and regulated by the Financial Conduct Authority.
Founder and Chief Executive Officer, MBU Capital, Mohammed Iqbal had then said the investment group was delighted with the acquisition of UBUK, describing it as a huge opportunity to build on UBUK’s strengths in international markets to create a new-style bank which is focused on the needs of UK and international SMEs and entrepreneurs.
According to him, many customers are seeking a bank which truly understands the needs of entrepreneurial, fast-growing businesses.
UBN subsequently hive-out Union Bank UK under a scheme that distributed its entire shareholdings in its United Kingdom’s subsidiary to its shareholders.
At the extra-ordinary general meeting of Union Bank’s shareholders; the meeting considered and approved the proposed divestment of the bank’s entire shareholdings-direct and indirect, in Union Bank UK to all the shareholders of UBN.
In a regulatory filing at the Nigerian Exchange (NGX), UBN indicated that all its equities in UBUK would be distributed to its shareholders pro rata to their existing shareholding interests in UBN, subject to obtaining any required contractual consents and regulatory approvals.
Under thedivestment and distribution, the shares to be held in UBUK by shareholders of the UBN who each hold less than 0.2546 per cent of UBN’s issued share capital shall be placed under a trust to be established with Stanbic IBTC Trustees Limited (SITL). SITL shall be the legal shareholder of record in UBUK’s register, acting as trustee of the beneficial interests of the relevant UBN shareholders.
Shareholders then approved and authorised SITL to, on behalf of the shareholders, enter into and execute all such agreements and documents, appoint such professional advisers and other parties as may be required, take all such actions and steps and do all such other lawful things as may be necessary for and incidental to, administering the trust in such manner as SITL, acting reasonably, considers appropriate in its capacity as trustee and for giving effect to the trust and or divestment.
-The Nation
KN
Tags: CBN Fidelity Bank Plc Mohammed Iqbal Nneka Onyeali-Ikpe Union Bank UK Plc
