TitanTrust Bank Acquisition of Union Bank

TitanTrust Bank Limited has completed the transaction to acquire a controlling position in Nigeria's second-oldest financial institution, Union Bank of Nigeria, it thus stated in a regulatory filing on Thursday, almost half a year after the two parties signed an agreement.

The bank, which is backed by Tunde Lemo, a former deputy governor of the Central Bank of Nigeria, initially planned to purchase an 89.4 percent stake in Union Bank from a pool of exiting major investors, including Atlas Mara and Union Global Partners Limited of the British Virgin Islands, but later upped the stake to 93.4 percent.

Somuyiwa Sonubi, Company Secretary of Union Bank wrote in an official statement that: “Following Union Bank of Nigeria Plc’s notification in December 2021 of the execution of a Share Sale and Purchase Agreement (SSPA) between the Bank’s majority shareholders – Union Global Partners Limited, Atlas Mara Limited, et al. – and Titan Trust Bank Limited (TTB), and the subsequent receipt of all necessary regulatory approvals, Union Bank hereby notifies Nigerian Exchange Limited (NGX), the Securities & Exchange Commission and members of the public of the completion of the transaction under the SSPA, which effectively transfers 93.41% of Union Bank’s issued share capital to TTB.

“Consequently, in compliance with NGX, Rulebook and the Amendments to the Listing Rules, Union Bank hereby notifies NGX, our esteemed stakeholders and the investing public of the following: ‘Union Bank hereby notifies NGX that with the completion of the transaction, TGI Group, parent of TTB, now becomes the majority shareholder and core investor in Union Bank.

“Union Bank hereby notifies NGX of the completion of the divestment of the Bank’s entire shareholding interest (direct and indirect) in its subsidiary, Union Bank (UK) Plc (“UBUK”), to all the shareholders in the Bank’s records as of 4th March 2022, pro rata to their existing shareholding interests in the Bank. Consequently, UBUK is not included in the transaction with Titan Trust Bank”.

Union Bank UK, a division of Union Bank of Nigeria, has also been sold off, with the benefits of the divestiture going to all of the latter's shareholders as of March 4, 2022.

In keeping with the shift of ownership, ten of the bank's thirteen board members have left, including CEO Emeka Okonkwo, who has just been at the helm for a year, and chair Beatrice Hamza Bassey.

“Earlier today we reached a significant milestone with the Completion, after regulatory approvals, of the epoch-making transaction announced in December 2021 between the Bank’s core shareholders and Titan Trust Bank,” Ms Bassey said.

Union Bank's Board of Directors also confirmed the nomination of Mr. Mudassir Amray as Chief Executive Officer, effective June 2, 2022, and Mr. Farouk Mohammed Gumel as Chairman, starting June 2, 2022.

The announcement of the sale rippled throughout the banking world in December of last year. TTB, a bank founded in 2019 and relatively unknown in Nigeria, has bought a majority share in Union Bank, the country's second-oldest bank.

TTB touts itself as a digital bank, and it intends to scale its "innovation-led model" of banking by leveraging Union Bank's reach (239 branches and around 1,000 cash points).

In 1917, the Union Bank of Nigeria was founded as a colonial bank and was nationalized in the 1970s. In 1993, the government sold its controlling 51.67 percent ownership to Nigerian corporate and private investors.

During the bank's recapitalisation exercise in 2012, Union Global Partners Limited (UGPL), a group of public and private entities including Africa Capital Alliance, African Development Corporation, Corsair Capital, FMO – the Dutch government's development finance institution – Chandler Corporation, and Standard Chartered Private Equity, invested $500 million.