Union Bank

[williamschichi]

Originally Posted by chibiks

Hi,

i really need urgent advise and opinions.

Union Bank is currently at NGN17.10 or so but I believe it will rally back to NGN42.00 or more by March 2009 or April 2009 at the latest.

Anyone know any reason why I should not buy this stock?

GO,GO,GO for it if you are for long term biz or investment.you will enjoy it then.
Check it out your slef if you are for short term but no one might advice you on this at this moment.

[chibiks]

@williamschichi

thanks a lot for your candid advise.

and for the insight.

[hispy99]

Originally Posted by chibiks

Hi,

i really need urgent advise and opinions.

Union Bank is currently at NGN17.10 or so but I believe it will rally back to NGN42.00 or more by March 2009 or April 2009 at the latest.

Anyone know any reason why I should not buy this stock?

@chibiks,

Can I ask why you believe that Union Bank will rally back to N42 by March 2009? Union Bank is not the most attractive stock in the banking sector. Except Union Bank releases a fantabulous result (and other banks don't), I don't see why only UBN's price will benefit from a rally. So if you believe that UBN will rally to N42, then you have to believe that all banks with better/similar fundamentals as UBN will rally similarly. If this sort of rally occurs, then PE of UBN goes to ~ 17. Are investors willing to pay for this kind of PE?

[citizen]

NSE is not kalo kalo. So i think he should just leave a fraction in UBN as a long term investment as the bank has a long way to go to catch up with other banks.
Zenith and Oceanic are the most profitable and closely followed by UBA and First Bank so UBN has a lot of work to regain market share.

Anyway maybe he knows who the strategic foreign investors are that would turn around the fortunes of this bank

[Monwowo]

Originally Posted by chibiks

Hi,

i really need urgent advise and opinions.

Union Bank is currently at NGN17.10 or so but I believe it will rally back to NGN42.00 or more by March 2009 or April 2009 at the latest.

Anyone know any reason why I should not buy this stock?

Believe ke.....deal with facts only oh. I have not followed Union bank much, but the signs out there are just not good except for the historical name. Read all the comments on this thread. The fact of the matter is this, the market could still proof you right because a lot of investors don't invest on facts. All the best!

[chibiks]

@hispy99

"Can I ask why you believe that Union Bank will rally back to N42 by March 2009?"

it was a steady and sharp decline in 2 months when the Company PAT increased by 104% - so I attribute the decline to the global crises.

Obama promises to inject money into the US economy in january and this will positively affect the global economy - so this can affect the share price to normalise.

Also year end is March - demand and nigerian's strange attraction to the stock can also cause the stock to rise.

Also there is a rough 2 year time frame support around the current price with RSI indicating the stock is oversold (panic selling i think); might be responsible for the price decline?

Profit after tax was over 104%. EPS improved. Barth Ebong has proven himself as a good manager. He is there till 2010.

"Except Union Bank releases a fantabulous result (and other banks don't), I don't see why only UBN's price will benefit from a rally. So if you believe that UBN will rally to N42, then you have to believe that all banks with better/similar fundamentals as UBN will rally similarly."
This is true and this is where my analysis falls flat! Well, maybe I am sentimentally attached to the stock!!!

The stock hasnt reached a new high in 2 years which supports what you have said too about there being better stocks out there. Guess its not good for short term speculation.

[chibiks]

Originally Posted by citizen

NSE is not kalo kalo. So i think he should just leave a fraction in UBN as a long term investment as the bank has a long way to go to catch up with other banks.
Zenith and Oceanic are the most profitable and closely followed by UBA and First Bank so UBN has a lot of work to regain market share.

Anyway maybe he knows who the strategic foreign investors are that would turn around the fortunes of this bank

Citizen, I have analysed this trend you have mentioned about Union Bank and found it to be true.

However, I have also noticed they are not really that interested in retail banking where they have lost market share - most of their profits come from high ticket oil and gas financing transactions, loans to farms, federal infrastructure projects etc with little retail banking. What do you think?

[mosbe]

Originally Posted by chibiks

Citizen, I have analysed this trend you have mentioned about Union Bank and found it to be true.

However, I have also noticed they are not really that interested in retail banking where they have lost market share - most of their profits come from high ticket oil and gas financing transactions, loans to farms, federal infrastructure projects etc with little retail banking. What do you think?

Union Bank own too much self. Although Year Ended 31st March it took them Over 7 months B4 paying div/bonus issue (Only God Knows when one would actually receive it). They should borrow a leaf from the new generation banks and declare their result/pay shareholders as soon as their year ends.

[hispy99]

Union Bank positions through asset growth
Thursday, 04 December 2008 00:16 NGOZI UCHE

The growing of assets of Union bank plc from N700 billion in 2007 to N1.13 trillion this financial year remains a strong parameter by which the bank has maintained its position as a one of the front liners in the banking industry.

The financial data of the company contained in its current annual report indicates that the group’s asset base made a quantum leap by about 61.2 per cent from it was last financial year. The bank also maintains a robust shareholders’ fund base in excess of N119 billion which also recorded a 16 per cent growth over previous year figure of N1.2.6 billion. This is quite remarkable considering that the bank raised fund last in 2005. This means that the consistent allocation of bonus shares to shareholders and financing of same has been the major source of increasing the shareholders’ fund.

The asset base of a company comprises its long and short term investments in equipment, technology and properties. It also includes loans and advances as well as investments in subsidiaries and associated companies in cash and short term funds. In comparison with the liabilities, it reflects the liquidity of the company in terms of ability to offset its debts. According to the group managing director/chief executive (GDM) of the bank, Barthe Ebong, “the efficient cost control measures put in place during the review period, coupled with the appropriate structuring and growth of earning assets, resulted in impressive profitability performance”.

The bank’s profit before tax (PBT) increased by 94.2 percent to N29.7 billion from N15.32 billion recorded in the previous year. However, the PAT of the bank was up by 104 per cent to hit N24.74 billion from N12.13 recorded in 2007.

Components of the asset base of Union Bank would include financing of centralized all back office/transaction processing activities into the central operations department, restructuring of its former 13 area offices into 41 business development centres (BDCs) to strengthen service delivery and improve relationship management in its new branch structure. Others are investments in its property arm and the property subsidiaries, chiefly Union Homes Savings and Loans plc and Union Property Company Limited.

It is pertinent to observe that the growth of the bank in key indicators as asset base, shareholders’ fund and profitability is a testimony to the management strategy employed by the bank. It is noteworthy to observe that the profitability of the bank in the period under review increased despite the high provision for risk assets. The provision was aimed at accelerating the clean up of the legacy non-performing accounts following the acquisition of former Union Merchant Bank Limited, Broad Bank an Universal Trust Bank in 2005..

On operating strategy, Ebong highlighted the core known as Enterprise Transformation programme code-named Project GEAR. He pointed out that the implementation of the first phase has been completed which touched on transformation of the systems, processes and procedures of the bank in some critical functional areas as human resources, ICT, credit and risk management.

In pursuit therefore of the goals of the Project GEAR, a new corporate strategic plan was developed to define the overall corporate intent and goal of the bank. He further stated that the objective was designed to achieve superior performance through synergies of a large branch network, product development and enhance organic growth rate.

“Strategic imperatives have been evolved to provide avenues for enhancing stakeholders’ value. These include, product development, customer-centric service delivery, financial and managerial discipline, development of managerial and leadership talents and the review or redesign of our business processes and systems”, the GDM stated.

[chibiks]

Hi,

did UBN give bonus this year?

[billions]

Originally Posted by chibiks

Hi,

did UBN give bonus this year?

Yes...1 for 6 and a div of 1 naira.

[mosbe]

Originally Posted by billions

Yes...1 for 6 and a div of 1 naira.

Has anyone's CSCS been credited with the 1 for 6 bonus?

[chibiks]

ok, I assume the share price has already been marked down on the exchange to reflect this bonus?

CSCS accounts are normally credited within 8 weeks - is that right?

[billions]

Originally Posted by mosbe

Has anyone's CSCS been credited with the 1 for 6 bonus?

I dont think so...

[chibiks]

Union Bank To Set Up Cash Points At Bus Terminals

Worried by the high rate of highway robberies involving luxury buses that often lead to loss of lives, Union Bank of Nigeria Plc has partnered the management of Chisco Transport Limited, to start cash points at their bus terminals throughout the country.
Executive Director, Union Bank Plc, Dr Kenneth Adeyemi, said the collaboration with Chisco, which had lasted for 25 years, was part of the bank's determination to deliver premium service to Nigerians.
Adeyemi, who called for increase security network on Nigerian roads to guarantee lives and property, described the bank's relationship with, Chisco as cordial and urged travelers to stop carrying cash during their journey.
He said the collaboration with Chisco to produce end-to-end service for customers was to check the bottleneck associated with carrying cash.
According to him, it was a deliberate policy of the bank to discourage customers from handling cash, as they now deposit their money at cash points at their major terminals.
Speaking on the collaboration at the weekend, the President of the Association of Luxury Bus Owners of Nigeria (ALBON) and Chairman, Chisco Transport Limited, Chief Chidi Anyaegbu, blamed the incessant armed robberies on the nation's highways on lack of alternatives like rail and water transportation in Nigeria.
Anyaegbu said the recent move by the company was to check the menace especially during the yuletide, Chisco boss urged travelers to deposit their cash and collect them at the point of departure.
The arrangement, he said, will reduce cases of robbery attacks on highways to 45 percent, as well as discourage robbers who are attracted by large cash carried by travelers.
According to him, other arrangements put in place to check the trend was the use of Close Circuit Television and tracking device that will check the activities of drivers on the highways.
New 17 luxury buses he said will also be delivered to the company to add up to the 150 in its fleets.
According to him, the company will launch some innovative services like mini buses, Chisco shuttle services and Chisco cargo express to address identified specific need of Nigerian traveling public.