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Union Bank, which traded at N21.12k before August 14, 2009, depreciated to a low of N5.99k after its recent take-over by the Central Bank of Nigeria (CBN). But by the close of trading last Friday, the stock has appreciated to N7.90k per share.
Some shareholders who spoke on the shares of the bank said that the stock has good value any day, irrespective of the change of the management of the bank. According to the President, Pragmatic Shareholders Association of Nigeria (PSAN), Mrs. Bisi Bakare, said the current price does not really reflect the potential of the bank.
"Union Bank is still a strong and reliable bank. What has happened notwithstanding, the bank has the potential to deliver good returns to shareholders. The intervention by the CBN has even strengthened the bank and the Group Managing Director/Chief Executive, Mrs. Funke Osibudo is an experienced manager of resources who is already doing a good job," she said.
Bakare added that but for the liquidity problem in the financial system, the shares of Union Bank would have been completely mopped up from the market.
"If you look at the repositioning agenda for the bank and how it's being executed, you will know the future is brighter. Many discernable investors should be taking advantage of the current price. However, the liquidity squeeze is preventing most of the investors from buying now. I advise my fellow investors not to miss the opportunity the current price of Union Bank is offering, because, by the time the financial results start coming out, it will boost returns on investments," she said.
Speaking in the same vein, Mr. Moses Igbrude of the Independent Shareholders Association of Nigeria (ISAN), said Union Bank has been a bank with good and consistent returns on investments in form of dividends and bonus issues over the years.
"When you consider the returns on investments in Union Bank over the years, you know that the current price is a very good opportunity for people to take a position and wait for similar returns in the nearest future. This is a bank that has been consistent with dividend and bonus issues. I know the bank remains strong fundamentally and the efforts by the current management will reposition it for better returns," he said.
During her maiden press briefing after her assumption of duty as the Group Managing Director/Chief Executive of the bank, Osibudo declared, "Union Bank remains a going concern as a big, strong, reliable bank."
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