Titan Trust Bank takes over Union Bank

Titan Trust Bank Limited, which only three years ago received the central bank's permission to operate in Nigeria, is acquiring an 89.4 percent share in Union Bank of Nigeria Plc, according to a report by PREMIUM TIMES

In a note to Nigerian Exchange Limited (NGX) on Thursday, Union Bank stated, "Completion of the transaction is subject to receiving necessary regulatory clearances and the fulfillment of certain conditions precedent."

Titan Trust will get the highest equity interest by a single investor in any of the country's publicly traded banks as a result of the acquisition.

That means that when the purchase is completed, just a small amount of Union Bank's stock will be available on the open market, unless the company decides to sell down portions of the newly acquired interest.

Monetize your Facebook

Following the news, Union Bank's shares rose 9.78 percent in Lagos, the largest price increase of any of the 157 equities listed on the NGX.

Titan Trust has been working in the shadows since its foundation, with only a few branches, earning N2.9 billion in after-tax profit in 2020, compared to Union Bank's N18.8 billion and an asset worth of N136.3 billion, versus N2.2 trillion.

However, the lender has positioned itself as a rival with a large heart, making its acquisition of the more well-known Union Bank the biggest upset in Nigeria's M&A landscape thus far in 2021, and possibly for the entire year.

Titan Trust Bank maintains a correspondent banking relationship with Citibank, located in New York.

When the transaction is finalized, a new name for Union Bank will most likely be established to represent the fresh shift and for branding considerations. When London-based Barclays Bank opened a branch in Lagos in 1917, Union Bank became Nigeria's second oldest bank.

"The transaction is a once-in-a-lifetime chance to merge Union Bank's long-standing and leading banking franchise with TTB's innovative model, which promises to strengthen the product and service offering for our combined valued customers," said Titan Trust chair Tunde Lemo.

Atlas Mara, a financial services firm based in the British Virgin Islands and Union Bank's largest shareholder, has been the subject of a series of exclusive Bloomberg reports about its plan to sell its 50% stake in the bank since January.

When PREMIUM TIMES contacted the bank for comment, the spokeswoman refused, and Union Bank later stated that a PREMIUM TIMES article on the divestiture plan was "unsubstantiated."

According to the document, Titan Trust will purchase the 89.4 percent stake from Union Global Partners Limited, the company's new majority shareholder, with the seller obtaining the shares from a pool of stakes formerly owned by other investors.

Commenting on the transaction, the chairperson of Union Bank, Beatrice Bassey, said: “On behalf of the Board, we congratulate all the parties involved in reaching this phase of the transaction and the Board looks forward to supporting the next steps to ensure a seamless completion of the process following regulatory approvals. We are grateful to our current investors whose significant and consequential investments over the past nine years facilitated the transformation of Union Bank, one of Nigeria’s oldest and storied institutions. Today, the Bank is well-positioned with an innovative product offering, a growing customer base of over six million and consistent year on year profitability. This is a solid foundation for our incoming investors to build on as we move into a new era for the Bank.”

The chairperson of Titan Trust Bank, Tunde Lemo, said: “The Board of Titan Trust Bank and our key stakeholders are delighted as this transaction marks a key step for Titan Trust in its strategic growth journey and propels the institution to the next level in the Nigerian banking sector. The deal represents a unique opportunity to combine Union Bank’s longstanding and leading banking franchise with TTB’s innovation-led model which promises to enhance the product and service offering for our combined valued customers.”

The Chief Executive Officer of Union Bank, Emeka Okonkwo, said: “This transaction marks a significant milestone in the journey of our 104-year old Bank. Whilst thanking our current investors for their unwavering commitment to the Bank over the years, we welcome our new core investor, TTB. We recognize thestrategic fit between the two institutions and expect that this deal will deliver the best outcome for our employees, customers and stakeholders. We look forward to collectively writing the next exciting chapter for Union Bank.”

Also the Chief Executive Officer of Titan Trust Bank, Mudassir Amray, said: “After completing over two years of operations with aggressive organic growth, we are excited to have an opportunity for a significant leap forward in market share. UBN’s widespread presence, state of the art technology platform, quality staff and strong brand loyalty fits well with our synchronized modular strategy. We look forward to delivering superior results for the benefit of our staff, customers, shareholders, and stakeholders.”

Don't forget to comment