Union Bank announces first dividend in years

Union Bank of Nigeria Plc announced earlier today that it will pay a final dividend of N0.25 for every 50 kobo share held by shareholders.

This is the first time the lender’s shareholders would be receiving any dividends, no thanks to years of dividend drought.

It should be recalled that despite a 39% rise to N18.1 billion in Union Bank’s 2018 net profit, it still could not declare dividends. This happened because the lender’s retained deficits, even as there are extant laws in place which forbid companies with retained deficits from declaring dividends.

A statement that was signed by the Company Secretary, Semuyiwa Sonubi, as seen in the website of the Nigerian Stock Exchange, disclosed that the dividend is subject to appropriate withholding tax as well as shareholders’ approval.

This has been fixed for the 24th of April, 2020. In line with this, therefore, shareholders whose names appear in the register of members as of May 1st, 2020, should expect their dividends transferred to their bank accounts.

Note that any shareholder that has not completed the e-dividend registration process will not be paid.

Therefore, shareholders who have not completed the e-dividend registration process have been advised to do so.

Some part of the statement by the company said:“Shareholders who are yet to complete the e-dividend registration are advised to download the form from the Registrars’ website www.cardinalstoneregistrars.com, complete, and submit to the Registrars or their respective banks.”

Meanwhile, the lender’s inability to pay dividends can be traceable to some of the challenges it has had to grapple with in recent years; including a financially difficult period that was occasioned by the 2009 banking sector crisis.

At some point, the Central Bank of Nigeria (CBN) even had intervened in the company’s affairs. After a temporary handover of ownership to the Asset Management Company of Nigeria (AMCON), the sum of $500 million was eventually used to recapitalise the bank.

In June 2019, the lender proposed to write off the sum of N54.458 billion, being accumulated permanent losses arising from legacy asset depreciation as of December 31st, 2018.