Union Bank of Nigeria is set to divest its interests in non-banking and portfolio companies within the next 18 months, to comply with the Central Bank of Nigeria’s (CBN) Regulation 3.
Issued in 2010, CBN’s Regulation 3 restricts banks in the country to operate as commercial, merchant or specialised banks.
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The move by the lender is intended to increase the protection of depositors’ funds and to lower the bank’s risk profile.
Union Bank of Nigeria CEO Emeka Emuwa said that owning non-banking units had become less important with the growth in its core business and its ability to partner with other firms to cross-sell products.
"Following (central bank) approval, Union Bank will proceed to divest its interests in its non-banking and portfolio companies … and operate as an international commercial bank," Emuwa added.
Union Bank of Nigeria chief risk officer Kandolo Kasongo said that the sale proceeds will be used to boost its balance sheet and to generate better returns to its various stakeholders.
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By GlobalDataIn 2009, CBN injected $4bn to bailout nine banks, including Union Bank, which were on the verge of collapse.
