Union Bank of Nigeria Announces CBN Approval of Compliance Plan

Union Bank of Nigeria Plc has notified The Nigerian Stock Exchange that it has received from the Central Bank of Nigeria (CBN) the approval to proceed with its plans for complying with CBN’s Regulation 3 on the Scope of Banking Activities and Ancillary Matters. The CBN regulation which was issued in 2010 repealed the Universal Banking Model in which banks were allowed to provide a broad range of financial services through subsidiaries. Regulation 3 restricts Nigerian banks to operating as Commercial, Merchant or Specialised banks.
Following the approval, Union Bank will proceed to divest its interests in its non-banking and portfolio companies, with the exception of Union Bank (UK) Limited, and operate as an International Commercial Bank.
Union Bank stated that the post-divestment structure will, in accordance with the objective of the CBN regulation, significantly reduce the overall risk profile of the Bank, while increasing the protection of depositors’ funds. It is also expected that the divestments will release capital to the Bank to further strengthen its balance sheet and enable Union Bank generate better returns to its various stakeholders.
The divestment process will be carried out with due process with proper consideration given to the characteristics of each portfolio company.
The CBN approval allows Union Bank eighteen months within which to implement its Compliance Plan. The Bank will ensure that only investors who are able to strategically drive the future of the portfolio companies are engaged. Pending the conclusion of the divestments, Union Bank remains committed to all its portfolio companies.

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