Chapter three
THE HISTORICAL BACKGROUND AND ASSESSMENT OF UNION BANK OF NIGERIA PLC
3.1 Introduction
The focus of this chapter is to examine the origin and practices of the case study, Union Bank of Nigeria PLC. It will be also discussing the relationship between staff selection and organizational performance within the banking industry.
3.2 Historical Background of Union Bank of Nigeria PLC
The Union Bank of Nigeria has a long and proud history dating back to 1917, when it first opened its doors for business as the Colonial Bank. In 1925 it was bought by Barclays, becoming Barclays Bank Dominion, Colonial and Overseas which it remained until the early 1970s (Union Bank, 2015).
In 1971, Barclays incorporated the bank locally in Nigeria as Barclays Bank of Nigeria plc and sold a significant shareholding to the Federal Government and the Nigerian public. In 1979 the banks name was changed to the Union Bank of Nigeria plc, to reflect the change in its ownership structure (Union Bank, 2015).
In the early 1990s the Nigerian Government started a policy of privatisation of state owned assets, which resulted in 1993 in both the Government and Barclays selling their remaining stakes in the bank to the public at large, thus creating a truly publically owned bank (Union Bank, 2015).
3.3 Union Bank of Nigeria’s Practices
Since the early 1990s the bank has enjoyed a period of unparalleled growth, acquiring Universal Trust Bank plc. Broad Bank Limited and Union Merchant Bank as well as increasing shareholder funds through a rights issue in 2005 (Union Bank, 2015).
The Union Bank of Nigeria now has a network of over 400 branches across Nigeria, a subsidiary in London and offices in Ghana, Benin and South Africa. In 2009 it posted gross earnings of US$980million and total assets of US$8.8billion (UBN Annual Report, 2009).
Following the banking crisis in 2009 and the intervention of the CBN via Asset Management Company of Nigeria (AMCON), the bank was recapitalized in 2012 with an injection of $500 million by Union Global Partners Limited (UGPL), a consortium of local and international investors. UGPL acquired 65% of the banks shareholding and in the last quarter of 2014, AMCON’s remaining 20% stake in the bank was acquired by Atlas Mara. UGPL comprises:
• Africa Capital Alliance
• Africa Development Corporation (ADC) `
• Corsair Capital
• The Netherlands Development Finance Company (FMO)
• Chandler Corporation
• Standard Chartered Private Equity
This consortium of investors in the Bank and UGPL, collectively own 65% of the Union Bank’s shareholding, the Asset Management Corporation of Nigeria owned 20.04% and a diverse group of shareholders hold 14.96%. In December 2014 and January 2015 Atlas Mara Limited acquired respectively, the Asset Management Corporation of Nigeria shareholding in ADC (African Development Corporation of Nigeria shareholding and majority shareholding In ADC (African Development Corporation) a member of the UGPL Consortium (Annual Reports & Accounts, 2014).
Having successfully completed its recapitalisation, Union Bank embarked upon a Transformation Programme aimed at re-establishing the Bank as one of Nigeria’s leading banks. Union Bank’s Transformation agenda revolves around a number of critical areas including operations, information technology, risk management as well as its overall strategy. Reliability is at the core of the Bank’s Transformation aspirations. The Bank’s goal is to be a reliable institution, one of which delivers the best service possible to its customers and consistently creates value for all its stake holders (Annual Reports & Accounts, 2014).
Union Bank operated a group structure with subsidiary and associate companies’ providing services across a number of sectors including mortgage, insurance, trusteeship, stock broking, property development and share registration businesses (Annual Reports & Accounts, 2014).
In compliance with CBN’s Regulation 3, UBN is divesting of all non-core banking subsidiaries, which aligns with the core values of the banking business model. Union Bank, United Kingdom (UBUK) remains the only subsidiary of the bank (Union Bank, 2015).
For nearly a hundred years, the union bank brand has lived in the hearts and minds of many generations. The bank has helped build individuals, businesses and institutions, and the brand lives in the hearts of many Nigerians, evoking nostalgia and a deep sense of affinity. This trust and goodwill has been a critical part of the banks success. They honour their past while embracing a new world (Union Bank, 2015).
3.4 Union Banks Brand and Service Promise(s)
Brand Promise
• We exist to make banking simple for our customers so that they focus on what matters most. Simpler is smarter.
Service Promise
• We are always there when you need us.
• We will provide quick and friendly service.
• We will provide simple and convenient ways of banking.
• We are fair and honest in our transactions.
• We will be your trusted partner and help you grow (Union Bank, 2015).
3.5 Union Banks Identity
The iconic white stallion which represents decades of heritage is now more dynamic, energetic and streamlined. The Union Bank blue is fresher and more vibrant, and the graphic patterns add to a contemporary look which supports the overall change happening within the Bank.
3.6 Governance in Union Bank
Union Bank is committed to the highest ethics and transparency in doing business. They implement best practices in corporate governance, and the Executive Management Team is accountable to our stakeholders. They conduct regular reviews and submit reports as part of compliance with the Code of Corporate Governance for banks, as mandated by the Central Bank of Nigeria (CBN).
Furthermore, a Board appraisal by an independently appointed consultant is also submitted to the CBN and presented to shareholders at the Annual General Meeting. Union Bank Group operates an interlocking organisational structure whereby some board members of Union Bank of Nigeria Plc act as external directors in the subsidiaries and associated companies. This arrangement ensures effective oversight and participation in the decision-making process of these companies, thereby safeguarding the Bank’s investments (Union Bank, 2015).
3.6.1 Governance Structures
The Board of Directors is composed of executive and non-executive members.
The Bank’s management is headed by Emeka Emuwa as the Group Managing Director/ Chief Executive. Other Executive Management team members are:
Adekunle M. Adeosun- Commercial/ Retail Banking (south) and Consumer Banking
Philip Ikeazor- Corporate, International/ Investment banking and Treasury
Ibrahim A. Kwargana- Commercial/Retail banking (North) and Public Sector
Mrs. Oyinkan Adewale- Chief Financial Official (Logbaby, 2015).
Together, they perform oversight functions through the following committees:
• Credit: Review and approval of advances and credit facilities within its limit, as well as credit applications for senior management and above. In addition institutional policy change proposals reviews are carried out prior to presentation to the Board.
• Establishment and Services: Responsible for staff welfare and workplace relations, as well as policy formulation for strategy and succession processes. The appointment, promotions and discipline of senior management and above also rests here.
• Finance and General Purpose: Review and recommendation of the Bank’s accounts, budgets and all purchases requiring up to 30% of annual budget.
• Risk Management: Supervision of all risk related issues and detailed analyses of institutional risk management policies.
• Independent Audit: Transparency as a Union Bank value is openly demonstrated with shareholder representatives given direct access to the external auditors. Three representatives are appointed at the Annual General Meeting (Logbaby, 2015).
3.7 Union Bank, Staff Selection and Organisational Performance
Union Bank of Nigeria Plc is concerned with recruitment and selection of individuals that will be able to make a positive impact in their organisation and also in the society at large. Union bank believes that the quality of their talent is a critical piece of their business strategy. The motto of Union Bank is to build a simpler and smarter bank and in order to do this Union desires to employ professional, resourceful and entrepreneurial individuals seeking to build an impactful career in a challenging and rewarding environment. The Union Bank culture is inclusive with a diverse workforce contributing to building a simpler, smarter bank (Union Bank, 2015).
According to Sarkar and Kumar (2007) as cited in Ekwoaba, Ikejie and Ufuoma, 2015, organizational performance is hinged on the approach which the organization adopts in the recruitment and selection of employees. Recruitment and selection in any organization is a serious business as the success of any organization or efficiency in service delivery depends on the quality of its workforce who was recruited into the organization through recruitment and selection exercises. Since recruitment and selection involve getting the best applicant for a job (Obikeze & Obi, 2004), as cited in Ekwoaba, Ikejie and Ufuoma, 2015, it has been emphasized that recruitment procedures that provide a large pool of qualified applicants, paired with a reliable and valid selection regime, will have a substantial influence over the quality and type of skills new employees possess. For Mullins (1999) as cited in Ekwoaba, Ikejie and Ufuoma, 2015, the important thing is for some suitable plan to be used, complying with all legal requirements relating to employment and equal opportunities, to follow recommended codes of practice and to ensure justice and fair treatment for all applicants.
In line with Union Banks business strategy of making banking simpler and better, the bank is ready to employ whatever means required in order to attract the right pool of individuals, from which potential employees will be selected from to be offered employment after series of viable tests.
References
Ekwoaba, J. O., Ikejie, U. U., and Ufuoma, N. (2015). The Impact of Recruitment and Selection Criteria on Organizational Performance. Global Journal of Human Resource Management, 3(2), 22-33.
Logbaby (2015). Retrieved 4th February 2016 from the website http://logbaby.com/directory/union-bank-of-nigeri_14951.html#.VrKuHfkrLIV
Union Bank of Nigeria Plc (2015). About Us. Retrieved 11th January 2016 from the website http://www.unionbankuk.com/about-us
Union Bank of Nigeria Plc. (2015). Annual Reports. Retrieved 4th February 2016 from the website https://www.unionbankng.com/uploaded/files/Annual%20reports/UBN-Annual-Report-2009.pdf
Union Bank of Nigeria Plc. (2015). Careers. Retrieved 4th February 2016 from the website www.unionbankng.com/careers
Union Bank of Nigeria Plc. (2015). Governance. Retrieved 4th February 2016 from the website www.unionbankng.com/investor-relations/governance
Union Bank of Nigeria Plc. (2015). Our Brand. Retrieved 11th January 2016 from the website www.unionbankng.com/ourbrand
Union Bank of Nigeria Plc. (2015). Our History. Retrieved 11th January 2016 from the website www.unionbankng.com/who-we-are/our-history