The Chief Executive of Union Bank, Emeka Emuwa said the bank plans to raise N50 billion in fresh capital via a rights issue by the end of the year to boost lending and hopes to win approval from the Securities and Exchange Commission for the plan this quarter.
The mid-tier lender has obtained the go-ahead from the central bank after shareholders approved the capital increase to support growth and meet regulatory requirements.
Union Bank of Nigeria Plc had posted gross earnings of N73.7billion in its half-year operations, against N60.1billion achieved in the corresponding period in 2016.
Specifically, the bank’s unaudited result for the half -year ended June 30, 2017, showed 23 per cent rise in gross earnings to N73.7billion from N60.1billion recorded a year ago.
Similarly, the bank’s profit after tax also increased from N8.7billion in 2016 to N9.2billion during the period under review, while profit before tax stood at N9.5 billion, representing six per cent rise, compared to N8.9 billion posted in 2016.
According to Reuters, Union Bank is targeting capital ratios of close to 20 per cent after the rights issue, from around 15 per cent now, adding that it has sufficient cover for its exposure to 9mobile, until the debt issue is resolved.
It would be recalled that lenders have agreed to extend a $1.2 billion loan which mobile operator 9mobile, formerly known as Etisalat Nigeria, took out four years ago but struggled to repay due to a currency crisis and a recession in Nigeria.
The chief executive, however, said on Monday that the bank has sufficient cover for its N3.9 billion loan to telecoms group, 9mobile. He added that the bank will focus on expanding lending to agricultural and real estate business.
He said Union Bank planned to grow its loan portfolio in the sectors that drive economic growth in Nigeria – food and housing.