Union Bank of Nigeria Plc and Titan Trust Bank (TTB) face uncertainty following a leaked ‘CBN Special Investigation Report’ on the acquisition process of Union Bank by TTB. Union Bank, recently delisted from the Nigerian Stock Exchange (NGX) after 52 years, is now dealing with potential confidence issues due to the controversy. TTB has sought to reassure stakeholders of the legality and transparency of the acquisition, but the ongoing uncertainty could impact customer perceptions and the financial stability of both banks.
Implications:
- Risk to Depositors: Union Bank’s N1.6 trillion in customer deposits and TTB’s N182 billion face concerns about stability and security. Clear communication and robust measures are needed to maintain depositor confidence.
- Risk to Interbank Activities: Increased scrutiny from other banks could affect the efficiency of interbank transactions, impacting lending, borrowing, and clearing services.
- Planned Merger and Regulatory Approvals: The planned merger depends on regulatory approvals, and the current controversy might influence decisions by regulatory bodies like the Securities and Exchange Commission (SEC). Legal proceedings could lead to delays or additional conditions for approval.
- Delisting from NGX: Union Bank’s recent decision to delist from the NGX, coupled with the controversy, could influence investor sentiment and market perception. The NGX and SEC decisions on the delisting process may be affected by the ongoing situation.
Ownership of Titan Bank: According to the 2021 annual report of Titan Bank, the majority shareholders are Aminu Yaro, Luxis International DMCC, and Magna International DMCC with 9.07%, 48.09%, and 37.39% respectively.
Source: Nairametrics