Fidelity Bank’s announcement that it has acquired 100% equity in Union bank, United Kingdom has elicited concerns by some minority shareholders in Union Bank.
OduNews had earlier reported that Fidelity bank entered into a binding agreement for the acquisition of 100% equity stake in Union Bank UK Plc for which the Central Bank of Nigeria has issued a letter of no objection.
Reacting to this development, the Chairman, Issuers and Investors Alternative Dispute Resolution (IIADRI), Mr Moses Igbrude, said: “Acquisition or buying of shares of companies is the major objective of having a capital market. There must be a willing seller and a willing buyer with the resources to do the transaction involved.
“So Fidelity Bank acquiring Union Bank UK is not surprising to me because the core investor there have since indicated their interest to divest from the bank and recently, the shareholders approved the sale at the Extra Ordinary General Meeting (EGM).
“My concern is that the bank should utilise the proceeds well to run and manage the bank for the benefit of all stakeholders.
“Since Titan Trust Bank Limited is now the new investor, they are the ones that will decide whether to use it for bad or good because they have the controlling power.”
Boniface Okezie, the national coordinator of the Progressive Shareholders Association said the move is in order and a welcome development.
“We gave a nod to the bank at the EGM to sell and distribute the money among the shareholders. If Nigerian Bank is buying it, I like it. It is a good one for Fidelity Bank which don’t have any offshore branch. Fidelity is a growing bank and needs it to consolidate in terms of sourcing for forex.
“Union Bank is selling to consolidate in the market and regain tier-one position in the local market. It has not been easy for them because a lot of distortion was carried out during the CBN intervention. The UK bank has not been growing revenue, they have been recording losses over the years. That is one major reason they want to dispose of it. You let it go when it wants to drive you down,” Okezie said.
A shareholder and the former President of Noble Shareholders Association, Chief Timothy Adesiyan, said: “None of all these old generation banks is worthy of writing home about. They have wasted our money and we are not growing younger with our investment in some of these banks.
“My concern is that any investor that thinks about them and how our money was wasted will not have rest of mind. The new generation banks are doing far better than them.
“Union Bank in Nigeria was offered for sale by the people who originally bought it when they discover it was not working. I am in support of the sale. When you buy something and it is not making profit, you need to sell it. I think they are planning IPO for recapitalisation. My belief is that Titan Trust will be able to operate the bank very well in Nigeria.”
