Union Bank of Nigeria Plc announced earlier today that it will pay a final dividend of N0.25 for every 50 kobo share held by its shareholders.
This is the first time the lender’s shareholders would be receiving any dividends in recent times, no thanks to years of dividend drought.
It should be recalled that despite a 39% rise in Union Bank’s 2018 net profit to N18.1 billion, it still could not declare dividends. This happened because of the lender’s retained deficits. There are extant laws in place that forbid companies with retained deficits from declaring dividends.
More details: A statement that was signed by the Company Secretary, Semuyiwa Sonubi, as seen on the website of the Nigerian Stock Exchange, disclosed that the dividend is subject to appropriate withholding tax as well as shareholders’ approval.
Qualification and payment dates: This has been fixed for the 24th of April, 2020. In line with this, shareholders whose names appear in the register of members as of May 1st, 2020, should expect their dividends transferred to their bank accounts on the 6th of May. Shareholders who are yet to complete the e-dividend registration process should not expect any payment.
Consequently, shareholders who have not completed the e-dividend registration process have been advised to do so. Some part of the statement by the company said:
“Shareholders who are yet to complete the e-dividend registration are advised to download the form from the Registrars’ website www.cardinalstoneregistrars.com, complete, and submit to the Registrars or their respective banks.”
Shareholders can smile again: As noted earlier, Union Bank was unable to pay out dividend for some years. The situation has left some of its shareholders frustrated as you can see I. The picture below.
The lender’s inability to pay dividends can be traceable to some of the challenges it has had to grapple with in recent years; including a financially difficult period that was occasioned by the 2009 banking sector crisis.
At some point, the Central Bank of Nigeria (CBN) even had intervened in the company’s affairs. After a temporary handover of ownership to the Asset Management Company of Nigeria (AMCON), the sum of $500 million was eventually used to recapitalise the bank.
However, all the troubles did not go away immediately after this. As Nairametrics noted in a previous article, numerous losses incurred from legacy transactions hindered Union Bank’s shareholders from getting dividends; until now.
In June 2019, the lender proposed to write off the sum of N54.458 billion, being accumulated permanent losses arising from legacy asset depreciation as of December 31st, 2018.