Union Bank Plc is said to be the latest bank making moves to comply with the Central Bank of Nigeria’s (CBN’s) Regulation No. 3 on “The Scope of Banking Activities and Ancillary Matters.”

The board of directors of the bank is deliberating on the bank’s compliance plan.
A source at Union Bank confirmed that the bank was considering its compliance plan.

“Yes, we are working on a plan to comply with CBN’s Regulation 3,” the source said, adding: “Engagement with key stakeholders is ongoing. We will inform regulators and shareholders appropriately.”

The CBN had, in November 2010, directed that banks in Nigeria could no longer operate under the universal banking model which had allowed them to engage in the provision of a wide range of financial services and non-banking activities directly or through their subsidiaries. Under the new regulation, banks were restricted to operating as commercial, merchant or specialised banks.

According to the CBN, the new regulation was aimed at reducing the risk to which the banks and depositors’ funds were exposed. Banks operating under universal banking license were each required to, within 90 days from November 15, 2010, submit to the CBN a detailed plan approved by the bank’s board, detailing the bank’s roadmap for complying with the regulation.

Since November 2010 when the regulation was issued, several banks have filed their compliance plans with the CBN, and subsequently, made considerable progress in the implementation of those plans. The vast majority of the banks in the country, including Guaranty Trust Bank, Zenith Bank and Diamond Bank complied strictly with Regulation 3, divesting their interests in their non-core banking subsidiaries.

The remaining few, such as First Bank of Nigeria and StanbicIBTC, reorganised under a structure where a new company was created to hold interests in the bank and subsidiaries.

Due to ongoing recapitalisation processes at Union Bank between 2010 and 2012, the bank was granted an extension with regards to when to file its compliance plan. Currently, the bank provides a broad range of banking and non-banking services through its subsidiary and affiliate companies which include Union Assurance Company Limited, UBN Capital Markets Limited, Union Homes Savings and Loans Limited, Union Registrars Limited, Union Pension Custodian Limited, UBN Property Company Limited and Union Bank (UK) Limited. The bank also has interests in Consolidated Discounts Limited, HFC Bank (Ghana) Limited and bank International du Benin.

Following a successful recapitalisation process, Union Bank is undergoing a transformation which, analysts said will lead the bank to take its rightful place in the financial services sector of the economy.

This transformation includes the recent strengthening and consolidation the bank’s board and management team. The bank is said to be focusing on service to its customers and ensuring that it delivers the best level of service possible.

In an interaction with the media in March this year, the bank’s new Group Managing Director, Emeka Emuwa, said the bank was committed to its customers and to providing them with high quality service and a broad array of competitive products and services.

He stated that ongoing transformation efforts were focused on the attainment of this goal and that every decision taken by the bank would be hinged on what was best for its customers. “We are looking into everything that needs to be taken care of to make sure we deliver the best service possible,” Mr. Emuwa said.

Specifically, Emuwa said that efforts to modernise the bank’s branches were being intensified, the bank’s workforce strengthened and skills upgraded. He also stated that technology was being upgraded and reinforced across the Bank.

The expectations are that the deliberations on the bank’s compliance plan will be concluded soon, following which Union Bank will submit a compliance plan to the CBN for approval.

Analysts are of the view that whatever decision the bank takes will be in line with its current focus of “providing excellent service to customers and regaining its position as a leading bank in the industry.”

Source: Thisday (by Kunle Adenirokun)