CATEGORIES: Private Equity, REITs & Funds

Union Bank’s property subsidiary has been listed on the NASD OTC Market

UBN Property Company Plc, a Union Bank of Nigeria subsidiary, has now been listed on the NASD following its approval to trade on the OTC Market. There are currently 5,626,416,050 UBN Property Company shares listed at ₦2 each, giving the company a market cap of ₦11,252,832,100. According to ProShare, the security was introduced by Equity Capital Solutions Limited by way of Security Admission.

UBN Property Company was incorporated on 24 March 2003 and is involved in the ‘development, sale and management’ of residential and office accommodation for corporate bodies and individuals. It will join MIXTA Real Estate Plc (formerly ARM Properties) and Afriland Properties Plc to trade within the real estate financials segment on the NASD.

As one of Nigeria’s oldest banks, Union Bank of Nigeria has accumulated a large portfolio of real estate assets over the years. Following the Central Bank of Nigeria’s requirement for commercial banks to divest of their non-core operations and assets and strengthen their capital adequacy ratios, the bank selected global broker JLL to conduct a strategic portfolio optimization exercise to rationalize their 300+ assets across Nigeria. It resulted in 13 disposals equivalent to ₦6.3 billion ($31.5 million) in Q4:2015.

In its 2016 Annual Report, Union Bank also reported that the proposed sale of the Bank’s 39% holding in UBN Property Company Limited was put on hold as a result of shareholder litigation initiated by two of the subsidiary’s shareholders. Within the same year, the value of investment properties held by Union Bank was ₦4.347bn through UBN Property Company. In Union Bank’s 9 month financial results presentation, this grew to ₦4,778bn.

Atlas Mara, who are aiming to create Sub-Saharan Africa’s premier financial institution, recently increased their stake in the bank to 48%. The company has led innovative reforms through Union Bank since it took a stake in the bank a few years ago.