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To address the huge deficit it had in 2018 financial year, Union Bank wants to reduce the credit balance in its share premium account.
The bank had N54.458billion at the end of 2018 as accumulated permanent losses from legacy transactions.
The lender in a release sent to the Nigerian Stock Exchange (NSE) on Thursday, explained that the restructuring of its balance sheet would not in any way affect its issued share capital or regulatory capital, “but should result in a reduction of the credit balance in the Bank’s Share Premium Account, while leaving the aggregate shareholders’ funds unchanged. “
It also noted that the restructuring would not affect the lender’s creditors, pave the way for the its investors to receive dividends out of future profits.
“In terms of mechanics and structure, the Bank’s Board of Directors (‘the Board’) is proposing a reduction of N54.458billion from the Bank’s Share Premium Account of N187.091billion, pursuant to sections 106 and 107 of Companies and Allied Matters Act (‘CAMA’). The reserve arising from the reduction of capital would be used to eliminate the negative retained earnings as at 2018 FYE,” the statement noted.
The bank would be seeking the approval of shareholders at an extra-general meeting scheduled for June 11.
