In a bid to offset a negative retained earnings in Union Bank’s accounts, the Board of Directors have proposed a Share Premium Reduction which shareholders have approved.
The Shareholders endorsed the move during the Bank’s Extra-Ordinary General Meeting (EGM) which held recently in Lagos.
The proposed reduction of N54.4 billion from the Bank’s Share Premium Account will restructure the Bank’s balance sheet for optimal performance.
Although the transaction is subject to confirmation by the Federal High Court, the bank in a statement assured that it’s in accordance with sections 106 and 107 of Companies and Allied Matters Act (CAMA).
“The transaction will have no impact on the Bank’s creditors or its shareholders’ funds but instead, is expected to pave the way for the payment of dividends to shareholders,” the statement noted.
Union Bank’s financial position as at December 31, 2018 indicated a deficit of N54.458 billion, representing accumulated permanent losses from legacy transactions.
Commenting on the development, the Chairman of the Board of Directors, Mr. Cyril Odu said;
“Union Bank is on course towards delivering its 2019-2021 strategic objectives. As we continue our push towards being Nigeria’s most reliable and trusted banking partner, we remain focused on improving the profitability of our business and delivering value to all our stakeholders – shareholders, customers, business partners and employees.”
Following the successful execution of the Bank’s debut local currency bond issue to raise N13.5bn and the tightening up of its loan portfolio, Union Bank remains well positioned to continue executing key business priorities in 2019 and beyond, Odu assured.