Titan Trust, the two year old bank that proposed last week to acquire the 104-year-old Union Bank, one of Nigeria’s centenary financial institutions, may not be a toddler after all going by what its Chairman, Tunde Lemo, has said.
In a terse Christmas Day message, Lemo threw some more light on the status of the young ambitious institution to provide some clarification on some issues about its ownership structure.
The former deputy governor of the Central Bank of Nigeria (CBN) said his involvement with the Titan Trust Bank does not go beyond being just a nominal shareholder.
Lemo said given his pedigree in the banking industry, he was recognised and made the Chairman of the Board of Directors to provide leadership to its management.
Although the proposed acquisition plan is still subject to a formal approval by the financial industry regulatory authorities, namely the CBN and the Securities and Exchange Commission (SEC), the banking industry has already hailed it as one of the most exciting development in 2021.
“This transaction shows the inbuilt dynamism and growing sophistication of our banking industry and its readiness to overcome its challenges. I commend the regulatory authorities for providing the necessary bulwark against systemic failures which we saw in the 1990s,” one financial sector analysts said of the transaction on Friday.
The analyst who described the proposed takeover as nothing unusual, said in the last 20 years, the industry witnessed a few of similar takeovers, which showed the strength of the country’s banking system.
He listed some of the takeovers to include that of the former Standard Trust Bank taking over United Bank for Africa (UBA) and Access Bank takeover of Intercontinental Bank and Diamond Bank.
In his statement, Lemo clarified that the ownership structure of Titan Trust Bank is 85 percent in favour of a foreign investor, Vinc Corporation, with some indigenous partners controlling the balance.
“My shareholding is therefore very tiny and insignificant. I am only a nominal shareholder, who was made the Chairman of the Board to provide leadership,” he said.
Vinc Corporation is the parent company of TGI, which has a conglomerate of 24 companies, Chi Limited, the most popular investment that was sold recently to Coca Cola for $1billion.
The chain of companies in the conglomerate have their foot in almost every sector of the Nigerian economy, ranging from Agriculture to Pharmaceuticals, fast-moving consumer goods, also known as consumer packaged goods, to rading and others.
Titan Trust Bank, which started operations in late 2018, was the conglomerate’s first foray into the financial services sector.
Lemo said Titan Trust Bank has the ambition of becoming a Tier 1 bank within a maximum of seven years.
The proposed acquisition of Union Bank, he said, is part of the bank’s ongoing agenda to pursue an inorganic growth plan to realise its target.
“The desire of the Private Equity Companies that owned UBN to sell the equity holdings matched the appetite and intention of the investors in Titan Trust Bank, hence the deal,” Lemo said.
About 90 percent of Union Bank is owned by pension funds managers, namely Global Partners Limited and Atlas Mara Limited, among others.
Analysts say the proposed acquisition would probably be the first deal in the country’s banking industry to arise from an alliance between investors with common objectives rather than the need to rescue the target bank.
Those familiar with issues in the banking system said the aspiration by Titan Trust Bank to emerge as a Tier 1 growth financial institution in seven years may not come that easy.
To meet that target, the analysts said Titan Trust Bank would need to work hard to acquire a major financial institution like First Bank, and perhaps another Tier 2 Bank like Fidelity Bank.