UBA Takes Final Steps To Restructure Into Financial Services Holding Company

Source: huhuonline.com

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United Bank for Africa (UBA) Plc, the pan African financial services Group with presence in 19 countries across Africa , has taken necessary steps towards restructuring into a financial services holding company, riding on the approval of shareholders at the court

 ordered meeting of shareholders, which held on Thursday December 29, 2011. Shareholders unanimously approved the plan for the group to operate the new structure, where a non-operating company to be listed and known as UBA Holdings Plc, will become the parent company of three intermediate Holding Companies namely; United Bank for Africa Plc, UBA Africa Holdings Limited and UBA Capital Holdings Limited.

United Bank for Africa Plc will hold the Nigerian commercial banking businesses, including the Bank's branch in New York, UBA Pensions Custodian and UBA FX Mart; UBA Africa Holdings Limited will hold and oversee all the African commercial banking businesses excluding Nigeria while the Groups investments in non-commercial banking businesses will be held by UBA Capital Holdings Limited in the new arrangement.

Also United Bank for Africa (UBA Plc) will remain a listed entity on the Nigerian stock Exchange. Existing shareholders will cede 60% of their holding in UBA Plc for 100% ownership of UBA Holdings Plc. In addition, UBA Plc will divest its ownership of African banking and non-commercial banking subsidiaries to UBA Africa Holdings Plc and UBA Capital Holdings Plc.  These two entities will in turn be wholly owned by UBA Holdings Plc

The restructuring by UBA is sequel to the approvals-in-principle obtained from the Central Bank of Nigeria (CBN) and Securities and Exchange Commission (SEC) respectively.    The rationale for the change in the current structure is to align the ownership and operation of the Group with the new licensing regime of the CBN. According to GMD/CEO UBA, Mr. Phillips Oduoza, 'this new move will eliminate duplication across business lines, whilst improving overall coordination. The assets of the commercial banking business in Nigeria will be ring-fenced from the other businesses'.

The restructuring will also lead to shareholder value maximization as the spun-off entities will post restructuring, be able to compete and grow their businesses through efficient asset utilization and strategic focus independent of the Bank. It is also expected to provide more robust governance and risk management framework, driven by core principles of responsibility and accountability. Executive Director, Group Executive Office, Mr. Emmanuel Nnorom said the Holdco structure creates a unique platform for a broader range of business and service offerings to entrench the Group's market competitiveness and allow respective management of each entity to be better focused. 'Value will be unlocked for the group, as investors will gain a deeper understanding of component sub businesses of the UBA Group and will be better able to ascribe values that match the earnings and growth profiles of these businesses.  It will also provide each entity with easier access to long term capital to finance growth thus protecting and creating value in two ways for shareholders' explained Mr. Nnorom

The restructuring of UBA into a financial service holding company does not affect the bank's current relationships with customers and as it only relates to the re-organization of entities within the Group.  'The terms and conditions of our existing contracts and obligations shall remain valid' said Mr. Oduoza.