Following recent regulatory changes in Nigeria, pan African banking group, United Bank for Africa Plc (UBA) announces the implementation of an innovative holding company structure that will drive operational efficiency, support its ambitious growth strategies and be a significant driver of shareholder value, while complying with the guidelines mandated by the Central Bank of Nigeria (CBN) for the separation of banking and non-banking financial service businesses.
The new structure streamlines the Group’s operating model, permitting the UBA Group to better serve key market segments, providing superior and evermore personalised services to customers and driving value for shareholders. The new holding company will ensure strategic, operational and brand synergies are maintained, whilst underlining renewed management focus on all customer segments.
Under the new structure, UBA Holdings Plc (UBA Holdings) will be established as the group parent, listed in Lagos with three operating subsidiaries - UBA Plc, which will remain listed, UBA Capital and UBA Africa. UBA Properties, the Group’s real estate operations will be spun off to shareholders as a separate listed entity, offering an immediate and tangible example of the Group’s commitment to identify and realise value for its shareholder base.
UBA Plc, which in line with the new CBN guidelines, will hold an international bank licence, remains the flagship business of the group. It will provide banking services to customers within Nigeria and in key international locations, including New York , London and Paris . UBA Plc will continue to leverage its large network of branches (700) and an innovative suite of e-banking products to serve its over 7.5 million customer accounts spread across Nigeria .
UBA Capital will encompass all the non-bank financial services businesses of the Group. These businesses, which have been providing synergistic benefits to the Group, include Asset Management, Stock-Broking, Insurance Broking, Trusteeship, Investment Banking and Company Registrar Services.
UBA Africa: With the increasing importance of the Pan African operations within the UBA group portfolio(presence in 18 Countries outside Nigeria), UBA has decided to create a dedicated business unit to hold all its bank subsidiaries across Africa outside Nigeria . The structure will provide the focus required for the delivery of our growth objectives in all these markets. UBA Africa will have its leadership in Nigeria and will work closely with UBA Plc to provide services to customers across jurisdictions where we do business.
UBA Properties is being established for the management of the group’s real estate business and, as an example of UBA’s commitment to demonstrating shareholder value, will be spun out to existing shareholders of UBA Plc. The group is confident that the efficiencies to be gained from this initiative will improve the return on existing real estate investments, which currently stand at over N100billion. With a dedicated management and a core real estate focus, the business will significantly increase value for all existing shareholders.
The introduction of a further pure play real estate business (through UBA Properties) by the UBA Group to the Nigerian Stock Exchange, will offer investors further opportunities for diversification and deepen the bench of quality stocks available to the growing institutional investors base in the country.
The Bank will be using this opportunity to put in place a best practice structure in accordance with international norms. The clear operational model, providing customer and management focus, would significantly enhance UBA’s ability to deliver on its mission to be Africa ’s Global Bank. The new arrangement, which is subject to approval by the regulatory authorities, will see UBA Plc replacing its universal banking licence with an international banking licence. A scheme of arrangement will be put to shareholders and on approval, will be submitted to the High Court. Implementation is expected in Q2 2011. Prior to CBN directive, the Bank had already been in the process of implementation of a holding company structure, but the recent directive by the CBN has enabled the group fast track the execution of this plan.
UBA currently operates in 19 countries across Africa, in addition to a global network based in London , New York and Paris , making the bank the natural home for African banking business for individuals, corporates and governments. UBA is Africa ’s Global Bank.