Shareholders of Union Bank of Nigeria Plc have approved the proposed reduction of N54.4bn from the bank’s share premium account in a bid to restructure its balance sheet for optimal performance.

The shareholders endorsed the move during the bank’s Extraordinary General Meeting in Lagos, according to a statement.

Union Bank’s financial position as of December 31, 2018 indicated a deficit of N54.458bn, representing accumulated permanent losses from legacy transactions.

In a bid to offset the negative retained earnings, the bank’s Board of Directors proposed the share premium reduction in accordance with Sections 106 and 107 of Companies and Allied Matters Act.

The transaction, which is subject to confirmation by the Federal High Court, will have no impact on the bank’s creditors or its shareholders’ funds but is expected to pave the way for the payment of dividends to shareholders, according to the statement.

The Chairman of the Board of Directors, Mr Cyril Odu, highlighted the bank’s focus on delivering value to its stakeholders.

He said, “Union Bank is on course towards delivering its 2019-2021 strategic objectives. As we continue our push towards being Nigeria’s most reliable and trusted banking partner, we remain focused on improving the profitability of our business and delivering value to all our stakeholders – shareholders, customers, business partners and employees.”

Following the successful execution of its debut local currency bond issue to raise N13.5bn and the tightening up of its loan portfolio, Union Bank remains well positioned to continue executing key business priorities in 2019 and beyond, according to the statement.