Nairametrics| Tier 2 lender, Union Bank intends to raise the sum of N50 billion Naira in the second quarter of 2017. The new funds will enable the firm to expand business, reposition their operations and meet regulatory requirements.
Banks in the country have had a challenging year. A slow down in economic activities meant banks made less money lending to customers. Sectors such as petroleum and power have been hard hit of recent with impairments.
For a small Bank like Union, the odds against it are more. The bank does not have enough capital to take part in big-ticket deals. It has been unable to define its niche market. A fall out of the Asset Management Company of Nigeria (AMCON) involvement with the bank has left the public wary of doing business with it. The bank’s push towards mobile technology has also not delivered as much as the bank would like.
Raising capital only solves half of the problem. The bank needs to draw a circle of competence and stick to it. Its mobile banking solutions need to be unique, as there are several banks with mobile solutions.
The Central Bank of Nigeria (CBN) took over five banks including Union Bank in 2009. Union Bank is majorly owned by a consortium of various investors including African Capital Alliance and Atlas Mara.