Shareholders See Buy Opportunity in Union Bank

SHAREHOLDERS have seen the current price of Union Bank of Nigeria shares as a very good buy opportunity given the growth potential in the financial conglomerate. Union Bank, which once traded at a height of N21.12 depreciated to a low of N5.99 after its recent take-over by the Central Bank of Nigeria (CBN). But at the close of trading last Friday, the stock has appreciated to N7.90 per share.

Some shareholders who spoke on the shares of Union Bank said that they are a good buy any day irrespective of what has happened since August 14, 2009. For instance, the President, Pragmatic Shareholders Association of Nigeria (PSAN), Mrs. Bisi Bakare, said that the current price does not really reflect the potential of the bank.

"Union Bank is still a strong and reliable bank. What has happened not withstanding, the bank has the potential to deliver good returns to shareholders. The intervention by the CBN has even strengthened the bank and the Group Managing Director/Chief Executive, Mrs. Funke Osibudo is an experienced manager of resources who is already doing a good job," she said.

Bakare added that but for the liquidity problem in the financial system, the shares of Union Bank would have been completely mopped up from the market.

"If you look at the repositioning agenda for the bank and how it being executed, you know the future is brighter. Many discernable investors should be taking advantage of the current price.

However, the liquidity squeeze is preventing most of the investors from buying now. I advise my fellow investors not to miss the opportunity the current price of Union Bank is offering because by the time the financial results start coming out, it will boost returns on investments," she said.

Speaking in the same vein, Mr. Moses Igbrude of the Independent Shareholders Association of Nigeria (ISAN) said Union Bank has been a bank with good and consistent returns on investments in form of dividends and bonus issues over the years.

"When you consider the returns on investments in Union Bank over the years, you know that the current price is a very good opportunity to take position and wait for similar returns in the nearest future. This is a bank that has been consistent with dividend and bonus issues. I know the bank remains strong fundamentally and the efforts by the current management will reposition it for better returns," he said.

During her maiden press briefing after her resumption as the Group Managing Director and Chief Executive Officers GMD/CE, Osibudo declared, "Union Bank remains a going concern as a big, strong, reliable Bank."

She expressed the resolve to reposition the bank with focus on risk management and control, marketing, business development and people management.

"The need to seriously strengthen our risk management system cannot be over-emphasised. We will strengthen our risk management system to be able to effectively guide decision-making relating to credit risk and operational risks," she said.

She said the bank's business module and portfolio would be reinvigorated to tap opportunities in diversified spheres.

"Our branches will be upgraded to be customer friendly in physical ambience as well as working tools. Technology will be very key in this regards," she said.

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