Union Bank of Nigeria Plc, H1 2012 Facts Behind the Figures

1. Union Bank of Nigeria Plc, H1 2012 Facts Behind the Figures Funke Osibodu Group Managing Director/Chief Executive

2. Outline 1 Overview of UBN 2 The Group- Business Divisions & Subsidiaries 3 Branch Footprint 4 Rescue and Reposition Strategy 5 Our Transformation Journey So far… 6 UBN Historical Performance 7 UBN Ratios 8 H1 2012 Results & Position Assessment 9 New Core Investors, Board & Management 10 Going Forward Strategy

3. Overview Of UBN • Established as Colonial Bank in 1917; later acquired by and re-named to Barclays Bank in 1925; became Union Bank of Nigeria in 1979 • Listed on the Nigeria Stock Exchange in 1971 • Has the third largest branch network in Nigeria with 349 branches • Key strengths • Iconic, trusted household brand • Low cost and stable deposit base • Pan Nigerian branch network • Banks most of the largest and prominent domestic corporates in Nigeria

4. Business Divisions 8 Subsidiary Entities/4 Associated Companies UBN Corporate Banking Retail Banking Treasury & Investment Banking Asset Management Insurance Other Group Companies

5. UBN Subsidiaries • UBN subsidiaries include: • UBN has requested for regulatory forbearance with compliance with CBN Regulation 3 of 2010 that • restricts the scope of banking activities • This is to allow for the input of core investors given the ongoing ownership and board changes

6. UBN Branch Footprint Extensive Distribution/ Branch Footprint(1) • UBN’s far-reaching network of ~350(1) branches that caters for both rural and sub-urban regions in Nigeriagives it a competitive advantage • The bank has a concentration of branches in the South West, the economic hub of Nigeria • With banking sector reform and current competition in the financial sector, the size of UBN’s branch network will be difficult to replicate Note (1) Excludes branches associated with Union Homes, UBN’s mortgage business

7. Union Bank Then (What went wrong?) Aging work force and decaying branch infrastructure Weak internal controls combined with poor financial controls Weak Corporate Governance and Absence of dynamic Management Weak Risk Management Framework & Systems Manual processes and inadequate technology support Issues Low Staff Productivity compared to Competitors Low contribution of Subsidiaries to Group Profitability Large Portfolio of Non-performing Loans High Cost to Income Ratio Un-reconciled GL balances Outcomes Low Fee Income Compared to Competitors Declining Market Share in core areas of business Operational Losses Increasing Number of Loss Making Branches Over concentration of loan portfolio on downstream oil and gas companies • CBN intervened on August 14 2009, replaced the Executive Management Team and appointed a five-man team largely • made up of professionals with strong and versatile experience to stabilise and recapitalise the bank. • The Central Bank of Nigeria’s made an initial $800mm cash injection (in the form of a 7-year, 6% note) into UBN in • 2009 to stabilize the institution, and contain the liquidity crisis. This has since been repaid • CBN guaranteed all inter-bank placements and foreign lines of credit to ensure continued confidence in the banking industry • Engagement of KPMG to undertake diagnostic review of Union bank and all its subsidiaries to independently • ascertain issues in the bank and set the context on identified lapses • Set up of Asset Management Corporation of Nigeria as a resolution vehicle to buy non-performing loans of banks and provide support in recapitalising the bank to encourage private sector interest in the banks CBN Intervention

8. Management Team FunkeOsibodu Group Managing Director Over 30 years experience in the banking sector Ibrahim Kwargana Director Commercial & Retail Banking, North Over 25 years experience in the banking sector Philip Ikeazor Director Corporate, Investment Banking and Treasury Over 21 years experience in the banking sector AdekunleAdeosun Director Commercial & Retail Banking, South Over 23 years experience in the banking sector • Internationally experienced team with extensive experience with various multinational corporates • Excellent performance of the team over the last 3 years resulting in the Managing Director being ranked amongst the top 50 world business women by the Financial Times Review

9. Reposition the Bank for Growth • Rescue and Repositioning Strategy Aug 09– Dec ‘09 Jan ’10 – Dec‘10 Jan’11 – Dec ‘12 ‘Close the Tap’ Union Bank ‘Reloaded’ – The New Union Bank Turn Bank into profitability Wind down the old bank in a safe & structured manner Commence medium term strategic renewal for sustainable growth Create a new bank that leverages the strengths of the old bank and create a merit-driven organization Clean up the books

10. Repositioning the Bank for Growth Selling and Marketing Aggressive, structured and focused marketing and sales approach to a well segmented customer base Operational Efficiency Leveraging scale, technology, superior business processes and cost to drive down the cost to income ratio Producing accurate and reliable financial information and developing a more strategic approach to economic strategy and forecasting to improve revenue and profit Increase workforce productivity through improvements in employee skill set, deployment and attitude Reducing loan losses on a sustainable basis and deploying a robust enterprise risk framework Risk Management Financial Strategy Capacity Building

11. Key Accomplishments During the Rescue & Reposition Phases (2010-2012) & Major Strategic Thrusts to Sustain Them In The Long Term

12. The Brand • Considered a first generation bank, UBN is one of Nigeria’s oldest and largest commercial banks by assets and size • Viewed as a national asset/household name in Nigeria • Strong brand recognition and a loyal customer base • Customer base mostly made up of people who have grown and stayed with the bank • Retained significant brand equity despite recent challenges • In order to maintain and grow the customer loyalty and brand recognition enjoyed by the bank, a rebranding drive has been initiated to make the brand more visible • Post the rebranding exercise, the internal transformation of the bank is also being evidenced externally The New UBN

13. OUR NEW LOOK (Cont’d)

14. UBN Historical Performance

15. UNION BANK-FUNDING & LIQUIDITY • The liquidity ratio has remained well above the regulatory requirement . • Above is a graphical representation of UBN’s Liquidity ratio trend between June • 2011 and June 2012

16. Diversified Loan Portfolio % by Industry, FY2009, FY2011 and H1 2012 2009 2011 JUNE 2012 • UBN’s loan portfolio has become more diversified • Oil & Gas, which made up a significant portion of loans in 2009 has declined from 30% to 10% at H1 2012

17. Rescue and Repositioning Strategy - Outcome Pre-Intervention Status • Declining market share in core areas of the business • Weak financial position: • High NPL ratio > 40% • Weak liquidity • Capital deficiency with CAR of -9.51% • Low level of branch profitability • Huge number of un-reconciled GL balances • High operational expense profile • Weak internal controls • Decaying branch infrastructure • Weak corporate governance • Poor risk management practices • Aging workforce • Poor financial control • Subsidiaries not leveraging Group synergy to drive value creation • Post-Intervention Status • Quality growth in market share and profitability • Strong financial position: • Low NPL ratio @ 5% • Strong liquidity • Solid capitalization with CAR of 20.79% • Increased number of profitable branches • Books significantly reconciled • Improved system of internal controls • Significantly reduced cost profile • Improved bank infrastructure • Strengthened corporate governance • Significantly improved risk management practices • Younger workforce emerging • Improved financial accountability • Accountable Subsidiaries

18. Half Year 2012 Results

19. Current Position Assessment of UBN Key: 1 – Excellent; 2 – Good; 3 – Satisfactory; 4 – Poor; 5 – Unsatisfactory

20. Recapitalisation through Core Investor led Strategy • Due diligence by prospective investors commenced in early 2010: • African Capital Alliance (ACA) investment consortium emerged as Preferred Core Investor • Proposed capital injection was $500million Tier 1 and $250million Tier 2 • ACA consortium - now Union Global Partners Ltd - holds controlling interest in UBN: • African Capital Alliance • Standard Chartered Private Equity • ABC Holdings Group • Corsair Capital • FMO Netherlands • Richard Chandler Corporation • A newly reconstituted board, reflecting the change in ownership of the bank, has commenced charting a course for the new Union Bank that will build upon, and complement, the stabilizing actions taken after the intervention

21. Full recapitalization accomplished in December 2011 with an AMCON bridge September, 2011 (USD200.5m) March, 2012 (USD397m) July/September, 2012 (USD500m) • African Capital Alliance • Standard Chartered PE • African Development Corporation • Corsair Capital • FMO • Inter-Private Equity • Partner Re • African Capital Alliance • Although UGPL’s investment took place in 3 phases, full recapitalisation was achieved in December 2011 through AMCON’s investment to: • bring net asset value to zero, & • Provide equity bridge of $299.5m to UGPL, which was fully taken up by UGPL in July/September 2012 • As promised to shareholders, Rights Issue was attempted (without success) by the Bank, but with no impact on full capitalisation • Post recapitalization, the UBN Board was reconstituted • Richard Chandler Corporation • African Development Corporation AMCON UGPL Current Shareholders • 20% 2) • 65%(5year lock up) • 15% • 100.0% UBN Holding Company • 100.0% UBN Other Subsidiaries/Associates

22. Consortium Members Private Equity

23. Consortium Members

24. Current Board & Management Highly Experienced

25. Current New Non-Executive Directors

26. Going Forward • The next phase of transformation is under the incoming Group Managing Director - Emeka Emuwa • This is a going forward journey, building upon the successes thus far delivered and based upon the core principles of: • Creating a client-driven institution serving customers through competitive and innovative products supported by positive customer experiences • Investing in top-tier people, efficient processes and scalable systems and infrastructure • Instituting holistic risk management strategies supported by underlying infrastructure to enable prudent growth

27. New Executive Management Team- November 2012 EmekaEmuwa Group Managing Director – Designate Ibrahim Kwargana Director Commercial & Retail Banking, North Over 25 years experience in the banking sector Philip Ikeazor Director Corporate, Investment Banking and Treasury Over 21 years experience in the banking sector AdekunleAdeosun Director Commercial & Retail Banking, South Over 23 years experience in the banking sector

28. Near-term and Long-term Strategy

29. Conclusion • New executive management installed by the CBN were successful over past three years in Rescuing & Repositioning the bank through: • addressing the issues that led to CBN intervention in the bank • redirecting the credit infrastructure and operational infrastructure, • rebranding the bank • improving the customer service and customer base • rejuvenating existing work force whilst also injecting a new breed of talent. • Amcon provided the facility to clean up the bank’s toxic assets and bridge the capital formation system • At the same time, working alongside the Central Bank capitalization plan for the bank, Union Global Partners Limited, a consortium of strategically aligned group of investors, completed it’s USD$500m recapitalization in September 2012. • Union Bank Group is now back in profit and progressing well • The new journey of transformation going forward will result in an institution that will create lasting value for all key stakeholders

30. OUR REALITY

31. Thank You