Union Bank receives N8bn cash for sale of UK subsidiary to Fidelity Bank

Union Bank receives N8bn cash for sale of UK subsidiary to Fidelity Bank

…Confirms Titan Trust Bank owns 94.5% of the bank

Union Bank Plc confirmed it sold its UK subsidiary, Union Bank UK for a cash consideration of N8 billion only. This is according to the information contained in its financial statements for the period ending December 2022.

The bank sold the subsidiary to local competitor, Fidelity Bank in May 2022 in a transaction that was initially reported as an undisclosed amount.

A cursory view of the transaction details shows Union Bank (group) posted a capital loss on the sale of the asset as the carrying cost (represented by its net assets) of its UK subsidiary on its books was N16.1 billion.

However, on the balance sheet of Union Bank UK, it reported a total asset of N50.89 billion and a net asset of N16.1 billion as of the end of May 2022. Loans advances and customer deposits as of that period were also N11.1 billion and N23.8 billion respectively.

Despite the sale, Union Bank UK still reported a loss from discontinued operations of N1 billion down from a loss of N2.45 billion as of 2011.

The sale of the UK subsidiary was part of Union Bank Plc’s restructuring plan to focus more on the Nigerian market and improve the bank’s capital base.

The bank also stated that the divestment allows it to channel its focus and capital toward mining the enormous opportunities that the Nigerian market presents.

The acquisition byFidelity Bank is expected to create a more scalable and sustainable service franchise to support the wider ecosystem of the bank’s trade businesses and diaspora banking services.

Fidelity Bank MD/CEO Mrs. Nneka Onyeali-Ikpe said, “This transaction aligns with our strategic plan of expanding our services touchpoints beyond the Nigerian market and providing straight-through services that meet and exceed the needs of our growing clients.

The diverse bouquet and business model of Union Bank UK offer a compelling synergy 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.

Union Bank released its 2022 FY results showing a profit after tax of N31.4 billion up from N20 billion reported a year earlier. The bank concluded a shareholder divestment in 2022 when Titan Bank was announced as the winner of a bid for majority shares of the bank.

In its full-year financial statements, the bank classified Titan Trust Bank as owning 94.05 per cent of Union Bank effectively taking over shares of Union Global Partners and Atlas Mara which held 64.99 per cent and 21.2 per cent respectively.