In a move that sent shocking waves across the business world, one of the new financial institutions in the country, Titan Trust Bank, established barely two years ago, has taken over one of the old generation banks, Union Bank of Nigeria Plc. A bank that is 104 years old. Only First Bank is older.
Union Bank Nigeria Plc broke the news a few hours ago in an announcement that it has reached an agreement to sell the majority stake of the megabrand to Titan Trust Bank Ltd. A press release published on the Nigerian Stock Exchange also confirmed it.Titan Trust Bank, which has veteran banker, Mr. Tunde Lemo, as its Chairman, is now in control of Union Bank after acquiring an 89.39 percent stake in the lender.
The new bank bought the shareholding from Union Global Partners Limited, though the deal is subject to obtaining applicable regulatory approvals and the fulfilment of certain conditions precedent.
“The board of Titan Trust Bank and our key stakeholders are delighted as this transaction marks a key step for Titan Trust in its strategic growth journey and propels the institution to the next level in the Nigerian banking sector.
“The deal represents a unique opportunity to combine Union Bank’s longstanding and leading banking franchise with TTB’s innovation-led model which promises to enhance the product and service offering for our combined valued customers,” Mr. Lemo, who left Wema Bank to the Central Bank of Nigeria (CBN), stated.
The deal will see existing core investors in Union Bank, Union Global Partners Ltd (64.98%), Atlas Mara (25.53%) and other shareholders divest their core holdings totaling 89.39% in Union Bank to Titan Trust Bank. The bank did not comment on the purchase consideration.
The deal, when consummated will be one of the most remarkable acquisitions in the Nigerian Banking space after STB acquired UBA in the landmark 2005 deal.
Union Bank currently has a market valuation of N147 billion trading at a price-to-earnings ratio of 5.69x. The bank has a net asset of N264 billion and a total asset of N2.56 trillion. The share price gained 10% today as investors who got wind of the deal loaded up the stock. Union Bank is down 5.3% in the last year. However, some investors are worried about a possible delisting of Union Bank following its takeover by Titan Trust Bank, which is controlled by a private conglomerate TGI Group and a Northern businessman, Aminu Yaro.
Yaro who sources tell MoneyCentral is often referred to as the Sarkin of Hausa in Lagos owns 9.07 percent of Titan Trust, other entities controlled by TGI Group own most of the rest (85.48%).
Tropical General Investments (TGI) Group is an international investment and holding company with diversified interests and investments across Africa, The Middle East, Asia, and other emerging markets.
TGI’s investments focus on driving inclusivity and value addition using locally sourced raw materials, state-of-the-art manufacturing facilities, and a highly-skilled workforce to produce world-class products that are consumed both locally and exported to global markets.
TGI brands in Nigeria include CHI Pharmaceuticals, Wacot, Titan Trust Bank, and now Union Bank.There is also the issue of the expertise of Titan Trust to execute the transaction and run and digest the much larger Union Bank. Titan Trust is a regional bank that had just about 110 staff at the end of the 2020 financial year.
Titan Trust reported a pre-tax profit of N2.93 billion for the 2020 financial year, compared to Profit before tax of N25.4 billion for Union Bank.Union Banks Gross earnings were down 1.9 percent to N156.9 billion in 2020, while Titan Trust’s gross earnings stood at N8.55 billion in the same period.
