Shelf Prospectus

This document is important and should be read carefully. If you are in any doubt as to its contents or the action to be taken, please consult your Banker, Stockbroker, Accountant, Solicitor or any other professional adviser for guidance immediately. For information concerning certain risk factors which should be considered by prospective investors, see “risk factors” commencing on page 43 hereof.

UNION BANK OF NIGERIA PLC RC 6262

N=100,000,000,000 DEBT ISSUANCE PROGRAMME

SHELF PROSPECTUS

This Shelf Prospectus and the Bonds which it offers has been approved and registered by the Securities and Exchange Commission (the “SEC” or the “Commission”). It is a civil wrong and a criminal offence under the Investments and Securities Act No. 29 of 2007 (the “ISA” or the “Act”) to issue a prospectus which contains false or misleading information. Clearance and registration of this Prospectus and the Bonds (as defined below) which can be issued under the Programme do not relieve the parties of any liability arising under the Act for false and misleading statements contained herein or for any omission of a material fact.

This Shelf Prospectus has been issued in compliance with Part IX of the Act, the Rules and Regulations of the Commission 2013 (as amended) (“SEC Rules”), the FMDQ Short Term Bonds Registration Process and Listing Rules 2016 as approved by the SEC, and the listing requirements of The Nigerian Stock Exchange (“The NSE”) and contains particulars in compliance with the requirements of the Commission for the purpose of giving information with regard to the Programme. This Shelf Prospectus will be available for download on the Commission’s website (www.sec.gov.ng) and the Issuer’s website (www.unionbankng.com).

Under this N=100,000,000,000 Debt Issuance Programme (the “Programme”), Union Bank of Nigeria PLC (“Union Bank” or the “Issuer” or the “Bank”) may from time to time issue bonds as more fully described herein (the “Bonds”). Bonds issued under the Programme may be (i) senior and unsecured; or (ii) senior and secured; or (iii) subordinated; or (iv) equity linked; or (v) convertible; or (vi) exchangeable or (vii) any other format recognised by the SEC, the FMDQ and The NSE and may be issued from time to time in separate series, amounts, prices and on terms to be set out in any accompanying supplementary Prospectus or Pricing Supplement (“Supplement”).

The maximum aggregate nominal amount of all Bonds issued from time to time and outstanding under the Programme shall not exceed N=100,000,000,000 over the three (3) years specified by the SEC as at the date of this Shelf Prospectus or any other time frame prescribed by the SEC following the issue of this Shelf Prospectus, including any amendments thereto.

This Shelf Prospectus is to be read and construed in conjunction with any Supplement hereto and all documents, which are incorporated herein by reference and, in relation to any series of the Programme, together with the applicable Supplements.

The registration of this Shelf Prospectus (“Prospectus”), including any Supplement shall not be taken to indicate that the Commission endorses or recommends the Bonds or assumes responsibility for the correctness of any statements made or opinions or reports expressed in this Shelf Prospectus. No Bond will be allotted or issued on the basis of this Shelf Prospectus later than the date that falls three (3) years after the date of the issue of this Shelf Prospectus or any other time frame prescribed by the SEC following the issue of this Shelf Prospectus.

A decision to invest in the Bonds offered by Union Bank should be based on consideration by the Qualified Institutional Investor and High Net-Worth Investor / Eligible Individual Investor of this Shelf Prospectus and any document incorporated by reference as a whole. An investment in certain Bonds may entail a risk of loss of all or a portion of the principal amount of the Bonds, which may be caused by fluctuation of interest rates; devaluation of the currency of issue; value of the Bonds at a securities market; or other indices or by a change in the condition of business or assets of the party selling the Bonds or other parties. Also an exercise of an option or other right associated with certain Bonds or cancellation of a contract for sale of certain Bonds may be subject to certain time limitations. (See the Section on “Risk Factors” on pages 43 to 59 for information on certain factors which should be considered by prospective investors). Investors are advised to note that liability for false or misleading statements or acts made in connection with this Shelf Prospectus is provided in sections 85 and 86 of the Act.

LEAD ISSUING HOUSE / BOOK RUNNER

STANBIC IBTC CAPITAL LIMITED (RC: 1031358)

JOINT ISSUING HOUSES / BOOK RUNNERS

BARCLAYS SECURITIES NIGERIA STANDARD CHARTERED UNION CAPITAL MARKETS LIMITED LIMITED (RC 1383925) CAPITAL & ADVISORY NIGERIA (RC 370890) LIMITED (RC 680774)

THIS SHELF PROSPECTUS IS DATED 07 SEPTEMBER 2018 THE PROGRAMME IS VALID FOR 3 YEARS FROM THE DATE OF ISSUANCE

IMPORTANT NOTICES This Shelf Prospectus has been prepared by Union Bank of Nigeria PLC in connection with its N100,000,000,000 Debt Issuance Programme for the purpose of giving information to prospective investors in respect of the Bonds described herein. The SEC has cleared and registered this Shelf Prospectus.

The Board of Directors accepts full responsibility for the accuracy of all information contained in this Shelf Prospectus and confirms (having taken all reasonable care to ensure that is the case) that the information contained in this Shelf Prospectus is in accordance with The NSE, FMDQ and The SEC Rules and has not omitted anything likely to affect the import of such information.

No person has been authorised to give any information or to make any representation not contained in or not consistent with this Shelf Prospectus or any other information supplied in connection with the Programme and, if given or made, such information must not be relied upon as having been authorised by the Issuer.

Neither this Shelf Prospectus nor any other information supplied in connection with the Bonds: (i) is intended to provide the basis of any credit or other evaluation or (ii) should be considered as a recommendation by the Issuer or any of the Issuing Houses that any recipient of this Shelf Prospectus or any other information supplied in connection with the issue of Bonds should purchase the Bonds.

Each prospective investor contemplating the purchase of any Bonds should make its own independent investigation of the financial condition and affairs, and its own appraisal of the creditworthiness of the Issuer. Neither this Shelf Prospectus nor any other information supplied in connection with the issue of Bonds or the Bonds constitutes an offer or invitation by or on behalf of the Issuer or any of the Issuing Houses to any person to subscribe for or to purchase the Bonds.

Neither the delivery of this Shelf Prospectus nor the offering, sale or delivery of the Bonds shall in any circumstance imply that the information contained herein concerning the Issuer is correct at any time subsequent to the date hereof or that any other information supplied in connection with the Programme continues to remain correct as of any time subsequent to the date indicated in the document containing the same.

The Issuing Houses do not undertake to review the financial condition or affairs of the Issuer throughout the life of the Bonds or to advise any investor in the Bonds of any information coming to their attention. The Issuing Houses have not separately verified the information contained in this Prospectus and accordingly no representation, warranty or undertaking, express or implied, is made and to the fullest extent permitted by law. No responsibility or liability is accepted whether in contract or otherwise by any Issuing House as to the accuracy or completeness of the information contained in this Prospectus or any other information supplied in connection with the Bonds or their distribution. Each person receiving this Shelf Prospectus acknowledges that such person has not relied on the Issuing Houses or any person affiliated with any of the Issuing Houses in connection with its investigation of the accuracy of this Shelf Prospectus or such information or its investment decision.

The receipt of this Shelf Prospectus or any information contained in it or supplied with it or subsequently communicated to any person does not constitute investment advice from any of the Issuing Houses to any prospective investor. Prospective investors should make their own independent assessment of the merits or otherwise of subscribing to the Bonds offered herein and should seek their own professional advice in connection with any prospective investment by them.

The distribution of this Shelf Prospectus and the offer or sale of Bonds may be restricted by law in certain jurisdictions. Persons who come into possession of this Shelf Prospectus or any Bonds must inform themselves about, and observe any such restrictions. In particular, there are restrictions on the distribution of this Shelf Prospectus and the offer or sale of Bonds in the United States of America, the United Kingdom and certain other jurisdictions. IMPORTANT NOTICES

The Issuer does not represent that this Shelf Prospectus may be lawfully distributed, or that any Bonds may be lawfully offered, in compliance with any applicable registration or other requirements in any such jurisdiction, or pursuant to an exemption available thereunder, nor does it assume any responsibility for facilitating any such distribution or offering. In particular, no action has been taken by the Issuer which would permit a public offering of any Bonds or distribution of this document in any jurisdiction (other than Nigeria) where action for that purpose is required. Accordingly, no Bonds may be offered or sold, directly or indirectly, and neither this Shelf Prospectus nor any advertisement or other offering material may be distributed or published in any jurisdiction, except under circumstances that will result in compliance with any Applicable Law and regulations.

CONTENTS

IMPORTANT NOTICES ...... 2 KEY TERMS AND ABBREVIATIONS...... 5 FORWARD LOOKING STATEMENTS ...... 10 OTHER INFORMATION ...... 11 ISSUE OF PRICING SUPPLEMENTS ...... 12 DECLARATION BY THE ISSUER ...... 13 PARTIES TO THE PROGRAMME ...... 14 DOCUMENTS TO BE INCORPORATED BY REFERENCE ...... 16 THE PROGRAMME ...... 17 DESCRIPTION OF THE PROGRAMME ...... 18 SUMMARY OF THE PROGRAMME ...... 20 INFORMATION RELATED TO THE PROSPECTUS ...... 23 TERMS AND CONDITIONS OF THE PROGRAMME ...... 24 RISK FACTORS ...... 43 IN RELATION TO NIGERIA ...... 43 IN RELATION TO THE NIGERIAN BANKING SECTOR ...... 44 IN RELATION TO THE ISSUER ...... 47 TAX CONSIDERATIONS ...... 60 NIGERIA – AN OVERVIEW ...... 62 OVERVIEW OF THE NIGERIAN BANKING SECTOR ...... 66 OVERVIEW OF UNION BANK OF NIGERIA PLC ...... 72 BOARD OF DIRECTORS AND MANAGEMENT TEAM OF UNION BANK ...... 73 CORPORATE GOVERNANCE ...... 78 USE OF PROCEEDS ...... 83 EXTRACT FROM THE ISSUER’S RATING REPORT ...... 84 REPORTING ACCOUNTANT’S REPORT ...... 87 1. CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ...... 89 2. CONSOLIDATED STATEMENT OF FINANCIAL POSITION ...... 90 3. CONSOLIDATED STATEMENT OF CASH FLOWS ...... 91 STATUTORY AND GENERAL INFORMATION ...... 92 1. INCORPORATION AND SHARE CAPITAL HISTORY ...... 92 2. SHAREHOLDING STRUCTURE ...... 93 3. DIRECTORS’ BENEFICIAL INTERESTS ...... 93 4. INDEBTEDNESS ...... 93 5. OFF BALANCE SHEET ITEMS ...... 94 6. SUBSIDIARIES ...... 94 7. CLAIMS AND LITIGATION ...... 94 8. EXTRACTS FROM THE MEMORANDUM AND ARTICLES OF ASSOCIATION ...... 94 9. DECLARATIONS ...... 95 10. COSTS AND EXPENSES...... 96 11. MATERIAL CONTRACTS ...... 96 12. RELATIONSHIPS BETWEEN THE ISSUER AND ITS ADVISERS...... 96 13. MERGERS AND TAKEOVERS ...... 96 14. CONSENTS ...... 96 15. DOCUMENTS AVAILABLE FOR INSPECTION ...... 97 FORM OF PRICING SUPPLEMENT ...... 98

KEY TERMS AND ABBREVIATIONS

In this document, unless otherwise stated or clearly indicated by the context, the following words have the meanings stated opposite them.

“Programme Limit” N=100,000,000,000

“Applicable Law” Any applicable Nigerian law (including common law), statute, constitution, judgment, treaty, regulation, rule, by- law, order, decree, code of practice, circular, directive, other legislative measure, guidance note, requirement, request, guideline or injunction (whether or not having force of law and, to the extent not having force of law, is generally complied with by persons to whom it is addressed or applied) of or made by any authority, which is binding and enforceable on or against the Issuer or the subject matter of, or any party to any of the Issue Documents “Board” or “Directors” or “Board of The members of the Board of Directors of Union Bank, who Directors” as at the date of this document are those persons whose names are set out on Page 73 of this Shelf Prospectus

“Bonds” A registered instrument of indebtedness or notice of allocation (for electronic credits directly to Bondholders’ CSCS accounts) issued by Union Bank pursuant to the Programme in accordance with the terms of this Shelf Prospectus and any applicable Supplement

“Business Day” Any day except Saturdays, Sundays and public holidays declared by the Federal Government on which banks are open for business in Lagos, Nigeria “CAMA” Companies and Allied Matters Act Chapter C20 LFN 2004 (as may be amended or republished from time to time)

“CBN” Central Bank of Nigeria established pursuant to the Central Bank of Nigeria Act 2007 (as may be amended or republished from time to time)

“Certificates” In relation to the Bonds,Bonds, a certificatecertificate in or substantially in the form specified in the Schedule to the Programme Trust Deed or in such other fformorm as may be agreed from time to time by the Trustees, issued to a Bondholder for the number of Bonds held by him and representing evidence of the BondholderNoteholder’s’s titletitle toto thethe numbernumber ofof Bonds specified in the Cbondertificate certificate

KEY TERMS AND ABBREVIATIONS

“CGT Act” Capital Gains Tax Act, Cap C1 LFN 2004 (as may be amended or republished from time to time)

“CITA” Companies' Income Tax Act Chapter C21, LFN, 2004 (as amended by the Companies Income Tax (Amendment) Act No. 11 of 2007 (as may be amended or republished from time to time)

“Closing Date” The date in relation to each Tranche stipulated as such in the applicable Supplement

“Conditions” In relation to the Bonds of any Series, the terms and conditions in accordance with which the Bonds will be issued as set out in the section headed “Terms and Conditions of the Bonds” in the relevant Series Trust Deed or as may otherwise be endorsed on or incorporated by reference into the Bonds constituting such Series and which is in the form or substantially in the form specified in the Trust Deed; having regard to the terms of the Bonds of the relevant Series, as may be agreed between the Issuer and the Trustees, in each case as may be from time to time modified in accordance with the provisions of the Trust Deed

“Coupon” The interest payable on any Bond (other than Zero Coupon Bonds) in the amount and on the dates specified in the Series Trust Deed

“Coupon Commencement Date” The date of issue for any particular Series of Bonds or such other date as may be specified in the Pricing Supplement from which the Coupon on the Bonds begins to accrue

“Coupon Determination Date” The date falling no later than 3 (three) Business Days prior to the Coupon Payment Date on which the Trustees determine the Coupon Rate applicable to a Bond (other than Fixed Rate Bonds and Zero Coupon Bonds)

“Coupon Payment Date” The date on which Coupons are to be paid to Bondholders as specified in the relevant Supplement

“Coupon Period” The period from (and including) a Coupon Payment Date (or as the case may be the Coupon Commencement Date) to (but excluding) the next Coupon Payment Date “Coupon Rate” The applicable rate of the Coupon as stated in the relevant Supplement and for a Floating Rate Bond, this will be the rate determined on a Coupon Determination Date for each Coupon Period by the Trustees

“CSCS” Central Securities Clearing System PLC

“Event of Default” The events of default, which are particularly described in Condition 9 of the Terms and Conditions of the Programme

“Par Value” The value the Bondholder will get per Bond on the Maturity Date “Federal Government” or “FGN” Federal Government of Nigeria

“FIRS” Federal Inland Revenue Service

KEY TERMS AND ABBREVIATIONS

“Fixed Rate Bonds” Bonds in respect of which interest is to be calculated and paid on a fixed rate basis and will not change during the life of the Bonds

“Floating Rate Bonds” Bonds in respect of which interest is payable in accordance with a variable benchmark rate as prescribed in the relevant Supplement

“FMDQ” FMDQ OTC PLC, a SEC licensed OTC market securities exchange

“FMDQ Rules” The FMDQ Short Term Bonds Registration Process and Listing Rules as approved by SEC on 6 October 2016 as may be amended from time to time

“Force Majeure” Any event or circumstance (or combination of events or circumstances) that is beyond the reasonable control of the Issuer and the Trustees, which materially and adversely affects the ability of any party to perform its obligations under or pursuant to the Trust Deed, which could not have been reasonably foreseen, including without limitation change of law, national emergency, war, acts of God, invasion by foreign enemy, revolution, act of terrorism, civil commotion, and industrial unrest

“FX” Foreign Exchange

“Bondholder” A person in whose name a Bond is registered in the Register of Bonds

“GDP” Gross Domestic Product

“IFRS” International Financial Reporting Standards

“IMF” International Monetary Fund

“ISA” Investments and Securities Act No. 29 of 2007 (as amended or republished from time to time)

“Issue Date” The date on which the Bonds are issued as specified in the applicable Supplement in relation to any particular Series or Tranche

“Issue Documents” The documents required to be executed and delivered in connection with the issue of the Bonds and includes the Trust Deed, the Shelf Prospectus and in relation to any Series, the Series Trust Deed, the Supplement and any other agreement or document filed with the Commission and relating to the issue of the Bonds

“Issue Price” The price at which the Bonds are issued, as specified in the Supplement

“Issuer” Union Bank of Nigeria PLC

“Issuing Houses” or “Issuing Houses Barclays Securities Nigeria Limited, Stanbic IBTC Capital / Book Runners” Limited, Standard Chartered Capital & Advisory Nigeria Limited, Union Capital Markets Limited and any other issuing house appointed from time to time by the Issuer either generally in respect of the Programme or in relation to a particular Series or Tranche of Bonds

KEY TERMS AND ABBREVIATIONS

“Joint Issuing Houses / Book Barclays Securities Nigeria Limited, Standard Chartered Runners” Capital & Advisory Nigeria Limited, Union Capital Markets Limited and any other issuing house appointed from time to time by the Issuer either generally in respect of the Programme or in relation to a particular Series or Tranche of Bonds

“LFN” Laws of the Federation of Nigeria 2004 as may be amended from time to time

“Lead Issuing House” or “Lead Stanbic IBTC Capital Limited, or if not so appointed, any Issuing House / Book Runner” successor issuing house appointed from time to time by the Issuer to lead a specific Series or Tranche of Bonds

“Material Adverse Effect” For as long as the Bonds are outstanding, the occurrence of any event or series of events, which, in the opinion of the Trustees, has adversely affected or could adversely affect (a) the ability of the Issuer to perform or comply with any of its obligations under the Trust Deed or (b) the business, operation, performance, condition (financial or otherwise), assets, or prospects of the Issuer; or (c) the validity or enforceability of any of the Programme documents or the rights or remedies of any party thereunder; ; “Maturity Date” The date as specified in each applicable Supplement on which the Principal Amount is due “Naira” or “N=” or “NGN” The Nigerian Naira, the lawful currency of the Federal Republic of Nigeria “NBS” National Bureau of Statistics

“Nigeria” The Federal Republic of Nigeria and the word “Nigerian” shall be construed accordingly “Offer” The offer of the Bonds to investors

“OTC” Over the counter

“Ordinary Shares” The ordinary shares held by the shareholders of the Bank

“PITA” Personal Income Tax Act Chapter, P8, LFN 2004 (as amended by the Personal Income Tax (Amendment) Act No. 20 of 2011) (as amended or republished from time to time)

“Principal Amount Outstanding” The principal amount outstanding and remaining unredeemed on the Bonds at any particular time

“Programme” or “Debt Issuance The Debt Issuance Programme described in this Shelf Programme” Prospectus pursuant to which the Issuer may issue several separate Series or Tranches from time to time with varying maturities and variable rates of interests: provided however that the aggregate value does not exceed N= 100,000,000,000

“Programme Trust Deed” or “Trust A master trust deed made between the Issuer and the Deed” Trustees, in relation to the Programme

“Prospectus” or “Shelf Prospectus” This Prospectus dated 07 September 2018 including any supplementary shelf prospectus

KEY TERMS AND ABBREVIATIONS

“Rating Agencies” Agusto & Co., Global Credit Rating Co. and any other rating agency appointed from time to time by the Issuer either generally in respect of the Programme or in relation to a particular Series or Tranche of Bonds

“Receiving Banks” Stanbic IBTC Bank PLC and Zenith Bank PLC and any other receiving bank appointed from time to time by the Issuer either generally in respect of the Programme or in relation to a particular Series or Tranche of Bonds

“Registrar” First Registrars and Investor Services Limited or any other entity appointed as registrar by the Issuer as specified in the applicable Supplement

“Reporting Accountants” PricewaterhouseCoopers or if not so appointed, any successor reporting accountant appointed from time to time by the Issuer to lead a specific Series or Tranche of Bonds

“Rules & Regulations” SEC Rules, FMDQ Rules and NSE Listing Rules

“SEC” or the “Commission” Securities and Exchange Commission

“SEC Rules” The Rules and Regulations of the Securities & Exchange Commission (2013) issued pursuant to ISA as may be amended from time to time

“Series” A Tranche together with any further Tranche or Tranches which are (i) expressed to be consolidated and form a single series and (ii) identical in all respects (including as to listing) except for their respective Issue Dates, Maturity Dates, Coupon Commencement Dates and/or Issue Prices

“Series Trust Deed” The trust deed made between the Issuer and the Trustees in relation to a specific Series under the Programme

“Short Term Bonds“ Bonds with maturities of one (1) year to three (3) years other than Bonds, as herein defined

“Supplement” Supplementary Prospectus or Pricing Supplement

“Supplementary Prospectus” or The document(s) to be issued pursuant to this Shelf “Pricing Supplement” Prospectus, which shall provide final terms and conditions of a specific Series or Tranche of Bonds under the Programme or supplement information contained in the Shelf Prospectus

“The NSE” or “The Exchange” The Nigerian Stock Exchange

“Tranche” Bonds which are identical in all respects (including as to listing)

“Trustees” ARM Trustees Limited, UTL Trust Management Services Limited and/or any other trustee that may be appointed from time to time

“USD” or “US$” The United States Dollar, the lawful currency of the United States of America

“VAT” Value Added Tax as provided for in the VAT Act as may be amended or republished from time to time

“VAT Act” The Value Added Tax Act, Cap V1, LFN 2004 (as amended by the Value Added Tax (Amendment) Act No 12 of 2007)

FORWARD LOOKING STATEMENTS Certain statements included herein may constitute forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements can be identified by the use of forward looking terminology such as “estimates”, “believes”, “expects”, “may”, “are expected to”, “intends”, “will”, ‘‘will continue”, “should”, “would”, “seeks”, “approximately”, or “anticipates”, or similar expressions or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy, plans or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Shelf Prospectus and include statements regarding the Issuer’s intentions, beliefs or current expectations concerning, amongst other things, the Issuer’s results of operations, financial condition, liquidity, prospects, growth, strategies and the markets in which it operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future.

Prospective investors should be aware that forward-looking statements are not guarantees of future performance of the Issuer or the industry in which the Issuer operates and that the Issuer’s actual results of operations, financial condition and liquidity and the development of the industry in which it operates may differ materially from those made in or suggested by the forward-looking statements contained in this Prospectus. Such forward-looking statements are necessarily dependent on assumptions, data or methods that may be incorrect or imprecise and that may be incapable of being realized. In the event that the Issuer’s actual results of operations, financial condition, liquidity and the development of the industry in which the Issuer operates are consistent with the forward looking statements contained in this Prospectus, it is not guaranteed that those results or developments would be indicative of results or developments in subsequent periods.

Factors that could cause actual results to differ materially from the Issuer’s expectations are contained in cautionary statements in this Prospectus and include, among other things, the following:

. Overall political, economic and business conditions in Nigeria; . Changes in government regulations, especially those pertaining to the banking industry; . Changes in tax requirements, including tax rate changes, new tax laws and revised tax law interpretations; . Economic and political conditions in international markets, including governmental changes; . The demand for the Issuer’s products and services; . Competitive factors in the industries in which the Issuer and its customers operate; . Interest rate fluctuations and other capital market conditions; . Exchange rate fluctuations; and . The timing, impact and other uncertainties of future actions.

The sections of this Prospectus entitled “Risk Factors”, “Description of Union Bank of Nigeria Plc”, “Reporting Accountant’s Report” and “Statutory and General Information” contain more detailed discussions of the factors that could affect the Issuer’s future performance and the industry in which it operates. In light of these risks, uncertainties and assumptions, the forward-looking events described in this Prospectus may not occur.

Nevertheless, when evaluating forward-looking statements, prospective investors should carefully consider the foregoing factors and other uncertainties and events, as well as the other risks identified in this Prospectus.

The Issuer does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to the Issuer or to persons acting on its behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this Prospectus.

OTHER INFORMATION This Prospectus should be read and construed in conjunction with the Issuer’s Audited Annual Reports for the financial years ended 31 December 2015, 31 December 2016 and 31 December 2017, comprising the audited annual financial statements of the Issuer and prepared in compliance with the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board and prescribed by the Financial Reporting Council of Nigeria (“FRCoN”) (which include standards and interpretations approved by the FRCoN), together with its pronouncements thereon from time to time, and applied on a consistent basis.

THIRD PARTY INFORMATION The Issuer has obtained certain statistical and market information that is presented in this Prospectus on such topics as the Nigerian economic landscape and related subjects from certain government and other third-party sources described herein. The Issuer has reproduced such information and, so far as the Issuer is aware and is able to ascertain from information published by such third parties, no facts have been omitted that would render the reproduced information inaccurate or misleading. Nevertheless, prospective investors are advised to consider this data with caution.

Prospective investors should also note that some of the Issuer’s estimates are based on such third-party information. Neither the Issuer nor any of the Issuing Houses have independently verified the figures, market data or other information on which these third parties have based their studies. Certain statistical information reported herein has been derived from official publications of, and information supplied by, a number of Government agencies and ministries, including the CBN, the Nigerian Debt Management Office (“DMO”) and the Nigerian National Bureau of Statistics (“NBS”).

ROUNDING Certain figures included in this Prospectus have been subject to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which precede them.

ISSUE OF PRICING SUPPLEMENTS Following the registration of this Shelf Prospectus with the SEC, a Supplementary Prospectus or Pricing Supplement may be prepared by the Issuer for the approval of the SEC, as the case may be, in accordance with Rule 279(3)(6)(b) of the SEC Rules.

Statements contained in any such Supplement shall, to the extent applicable (whether expressly, by implication or otherwise), be deemed to modify or supersede statements contained in this Prospectus. Any statement so modified or superseded shall not, except as so modified or superseded, constitute a part of this Prospectus.

Union Bank declares that, to the best of its knowledge and honest belief, no material facts have been omitted from, and there are no material misstatements in this Prospectus, which would make any statement contained herein misleading or untrue. Union Bank will, in the event of any significant new factor or material mistake or inaccuracy relating to information included in this Prospectus that is capable of affecting the assessment of the Programme or the Bonds, prepare a Supplement to this Prospectus or publish a new Prospectus for use in connection with any subsequent issue of Bonds.

DECLARATION BY THE ISSUER

PARTIES TO THE PROGRAMME

Issuer's Counsel Transaction Counsel

Aluko & Oyebode ~~ Udo Udoma & Belo-Osagie Me uLA S44 {VI () LA 1, Murtala Muhammed Drive St. Nicholas House (12th Floor) Ikoyi Catholic Mission Street Lagos tJ\.-",.{Svd,J(V\\ ~~rJ Lagos Island _ (\ ~_ I"J. V\ ~ Lagos ~~

Reporting Accountant

PricewaterhouseCoopers Landmark Towers 5B, Water Corporation Road Victoria Island Lagos

Trustees

ARM Trustees Limited UTL Trust Management Services Limited nd 1, Mekullwen Road ED Building (2 Floor) Off Oyinkan Abayomi Drive 47M=r~~ LagO~~ ~;:~s 'rf{Y;i;~ a (C[ ~cJ(l~ ' -MLP~"" "' Legal ~ser t~ tP.:!!:::t Banwo & Ighodalo 98, Awolowo Road South-West Ikoy; Lagos

Rating Agencies

Agusto & Co. Global Credit Ratings Co~ J..' I\'\. ~ fI",z th UBA House, 5 Floor ~ 17th Floor (-'V~wp 57, M 'W~ . _() _ f2.. ( ()/I /J New Africa House Lagos ~ C c::c..e(5 ~ '-- 31 , Marina , Lagos ~ Recelvmg~ · B an ks ~ . . / Stanbic IBTC Bank PLC . Zenith N\\~Bank PLC I.B.T.C. Place . ~. ,';;)t Plot 84, Ajose AdeOgUn~t e rt\ Walter Carrington Crescent~ J~\fJ/!VV Victoria Island Lagos Victoria Island L --0 Lagos

Registrar Auditor

First Registrars and Investor Services KPMG Professional Services Limited , ~ KPMG Tower ~ cAtv A Plot 2, Abebe Village Road _~ 1(:.\ \;v'J I , Bishop Aboyade Cole Stree . ~\" \:)\"..~ ij/i Victoria Island "1 Iganmu ~ lU~ Lagos~)~~ Lagos . ~w'

II 15

DOCUMENTS TO BE INCORPORATED BY REFERENCE The Issuer will, in the event of any material change in its financial position, which is not reflected in this Prospectus, prepare an amendment or supplement to this Prospectus; also, the Issuer’s information given in this Prospectus and the terms and conditions of additional Bonds to be issued under the Programme may be updated in a Supplement pursuant to the Rules & Regulations. Any such amendment or supplement will be incorporated by reference into this Prospectus and forms an integral part hereof. Any statement contained in a document that is incorporated by reference herein shall be deemed to be modified or superseded for the purpose of this Prospectus to the extent that a statement contained herein modifies or supersedes such earlier statement (whether expressly, by implication or otherwise). Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus.

This Prospectus and any Supplement (as applicable) are accessible, and copies of them are available free of charge at the offices of the Issuing Houses from 8:00 am till 5:00 pm on Business Days, and on the website of the Issuer (www.unionbankng.com), during the validity of the Programme.

Telephone enquiries should be directed to the Issuing Houses on:

Stanbic IBTC Capital Limited: +234 1 422 8000 Barclays Securities Nigeria Limited: +234 1 700 0275 Standard Chartered Capital & Advisory Nigeria Limited: +234 1 236 8000 Union Capital Markets Limited: +234 1 280 6860-1

DESCRIPTION OF THE PROGRAMME

THE PROGRAMME This Prospectus is issued pursuant to the Rules and Regulations and contains particulars in compliance with the requirements of the SEC, NSE and FMDQ for the purpose of giving information to the public with regard to the N=100,000,000,000 Debt Issuance Programme established by the Issuer. The specific terms of each Series or Tranche in respect of which this Prospectus is being delivered will be set forth in the applicable Supplement and shall include the specific designation, aggregate principal amount, the currency or currency unit for which the Bonds may be purchased, maturity, interest provisions, authorised denominations, Issue Price, any terms of redemption and any other specific terms. If a specific issue under the Programme requires a listing, an application will be made to The NSE and/or the FMDQ for the admission of such Bonds to the relevant exchange.

Each of the Directors represents that he/she has taken reasonable care to ensure that the information concerning the Issuer contained in this Prospectus is true and accurate in all material respects as at the date of this Prospectus and confirms, having made all reasonable enquiries, that to the best of his/her knowledge and belief, there are no material facts, the omission of which, would make any material statement herein misleading or untrue.

LEAD ISSUING HOUSE / BOOK RUNNER

STANBIC IBTC CAPITAL LIMITED (RC: 1031358)

JOINT ISSUING HOUSES / BOOK RUNNERS

BARCLAYS SECURITIES NIGERIA STANDARD CHARTERED UNION CAPITAL MARKETS LIMITED LIMITED (RC 1383925) CAPITAL & ADVISORY NIGERIA (RC 370890) LIMITED (RC 680774)

ON BEHALF OF

UNION BANK OF NIGERIA PLC RC 6262

are authorised to issue this Shelf Prospectus in respect of

THE N=100,000,000,000 DEBT ISSUANCE PROGRAMME

This Prospectus contains: 1. on page 13, a declaration to the effect that the Issuer and its subsidiaries did not breach any terms and conditions in respect of borrowed monies which resulted in the occurrence of an Event of Default and an immediate recall of such borrowed monies during the twelve (12) calendar months immediately preceding the date of filing an application with the SEC for the registration of this Prospectus;

2. on pages 87 to 88, the Reporting Accountant’s Report on the Issuer’s historical financial information, prepared by PricewaterhouseCoopers for incorporation in this Prospectus;

3. on pages 84 to 86, extracts of the Rating Reports prepared by Agusto & Co and Global Credit Rating Co.; and 4. on page 94 the details and summary of the claims and litigation against the Issuer prepared by Udo Udoma & Belo-Osagie.

DESCRIPTION OF THE PROGRAMME

DESCRIPTION OF THE PROGRAMME Under the proposed Programme structure, a single consolidated Programme will be established whereby applications to issue Bonds with a tenor of between one and three years (Short Term Bonds) may be routed through FMDQ for processing and ultimate approval and registration with the SEC, and applications to issue Bonds with a tenor of three years and above submitted directly to the SEC. Regardless of the route of application and approvals for the Bonds to be issued, all Short Term Bonds will ultimately be approved and registered by the SEC pursuant to the Programme. At the discretion of the Issuer, applications for Short Term Bonds may also be submitted directly to the SEC. Union Bank of Nigeria Plc may from time to time issue Bonds, in Naira or an equivalent in such other currency or currencies as may be specified in the applicable Pricing Supplement. The applicable terms of the Bonds will be set out in the Terms and Conditions incorporated by reference into the Shelf Prospectus and the applicable Supplement. A summary description of the Programme, the proposed issuance structure, regulatory framework and a summary of the Programme terms and conditions, is set out in this section, and sections under the respective headings “Description of the Issuance Structure” and “Summary of the Programme”.

This Shelf Prospectus will apply to the Bonds issued under the Programme, in an aggregate nominal amount outstanding, which does not exceed the Programme Limit.

DESCRIPTION OF THE ISSUANCE STRUCTURE AND REGULATORY FRAMEWORK

The establishment of this Programme has been undertaken by Union Bank of Nigeria Plc to facilitate, including but not limited to, growing the Issuer’s asset base and shoring up the Bank’s existing capital base and for such other specific purposes as may be determined from time to time.

The applicable Supplement for each Tranche or Series under the Programme will specify details of the use of proceeds of the particular Tranche or Series.

Under this Programme, Bonds will be issued, and registered by the SEC as applicable. To enable the issuance of Bonds with a tenor of between one and three years applications may be routed via FMDQ and Bonds with a tenor of three years and longer directly with the SEC. The Short Term Bonds to be issued under the Programme (between one and three years) will be in accordance with the framework for the issuance of Short Term Bonds as set out in the FMDQ Rules, while the Bonds will be governed by the applicable process for issuance of issuing securities under the SEC Rules.

A summary of the documentation governing the Bonds to be issued under the Programme is outlined below:

i. This Prospectus disclosing material information in relation to the Issuer; ii. The relevant Supplement containing specific terms relating to that particular issue of Bonds; iii. A Programme Trust Deed between the Issuer and the Trustees setting out inter alia, the powers, rights, obligations/duties of the Trustees in relation to the Bonds issued under the Programme; iv. Series Trust Deeds will be entered into constituting each series of Bonds issued by Union Bank, and will contain specific terms relating to that particular issue of Bonds; and v. Vending Agreement between the Issuer and the Issuing Houses in connection with the roles of management and marketing of the offer amongst others. These will be prepared on a series by series basis.

The documentation of each Series will specify which Bonds are being issued. Documentation relating specifically to the issuance of Bonds will be filed and reviewed by the regulators – FMDQ and/or SEC in relation to Short Term Bonds and the SEC in relation to Bonds.

DESCRIPTION OF THE PROGRAMME

VALIDITY PERIOD OF THE PROSPECTUS AND DELIVERY OF DOCUMENTS

This Prospectus is valid from its date until 07 September, 2021 (“Validity Period”). No Bonds shall be issued or allotted on the basis of this Prospectus read together with the applicable Supplement(s) later than the Validity Period or any other validity period as enforced by the SEC from time to time unless the Validity Period is renewed by the Commission.

This Prospectus can be obtained free of charge from the offices of the Issuer and any of the Issuing Houses and can also be downloaded from the respective websites of the Commission and the Issuer, throughout its Validity Period.

SUMMARY OF THE PROGRAMME

This summary should be read as an introduction to this Prospectus. It does not purport to be complete and is taken from, and is qualified in its entirety by, the remainder of this Prospectus as a whole, any Supplement and other documents, if any, incorporated by reference into this Prospectus.

TERMS DESCRIPTION Issuer: Union Bank of Nigeria Plc. Programme A Debt Issuance Programme undertaken by the Issuer of convertible and Description: non-convertible, senior or subordinated debt instruments to be issued in Series and or Tranches. The Programme covers Fixed Rate Bonds, Floating Rate Bonds, Reverse Floating Bonds, Zero Coupon Bonds, any combinations thereof and in any other format recognised by the SEC, all of which shall be denominated in Naira or in such other currency as may be agreed between the Issuing Houses and the Issuer and specified in the applicable Supplement.

No Bonds shall be offered on the basis of this Prospectus or any Supplement after the expiration of the Validity Period or any other validity period as enforced by the SEC from time to time unless the Validity Period is renewed by the SEC.

The Bonds shall be constituted by the Programme Trust Deed and a Series Trust Deed. A Series Trust Deed will be issued in respect of each Series, provided that any terms and conditions relevant to additional Bonds, if any, under the Programme shall be governed by the relevant Series Trust Deed.

Programme Limit: N=100,000,000,000 (One Hundred Billion Naira) aggregate principal amount of Bonds outstanding at any one time. Lead Issuing House / Stanbic IBTC Capital Limited, or if not so appointed, any successor issuing Book Runner: house appointed from time to time by the Issuer to lead a specific Series or Tranche of Bonds Joint Issuing Houses / Barclays Securities Nigeria Limited, Standard Chartered Capital & Book Runners: Advisory Nigeria Limited, Union Capital Markets Limited and any other Issuing House appointed as Joint issuing House/Book runner from time to time in relation to a specific Series of Bonds issued under the Programme. Trustees: ARM Trustees Limited and UTL Trust Management Services Limited or such other Trustees specified in applicable Supplement. Method of Issue: The Bonds issued under the Programme may be offered and sold by way of public offering or private placement, through a book building process and/or any other methods as described in the applicable Supplement, within Nigeria or otherwise, in each case in accordance with the applicable Rules and Regulations. Issuance in Series: The Bonds will be issued in Series, and each Series may comprise one or more Tranches issued on different dates. The Bonds in each Series will have identical terms (except that the Issue Dates, Maturity Dates, Issue Price, Coupon Commencement Dates and related matters may be different). Details applicable to each Series and Tranche will be specified in the applicable Supplement.

Currency: The Bonds shall be denominated in Naira (N=) or in such other currency as may be agreed between the Issuer and the Issuing Houses and specified in the relevant Supplement, subject to compliance with all applicable legal and regulatory requirements. Where any currency other than the Naira is specified in the relevant Supplement, the selling restrictions and additional disclosure requirements applicable to such other currency will be specified in the relevant Supplement.

Use of Proceeds: The net proceeds from each Series or Tranche under the Programme shall be used solely for the purposes for which the Bonds were issued and shall be disbursed in the manner disclosed in the applicable Supplement. Maturities: The Bonds shall have such maturities, as may be agreed by the Issuer and the Issuing Houses and specified in the applicable Supplement, subject to such maturities as may be allowed or required from time to time by the relevant laws or regulations applicable in Nigeria. Maturity Date: As specified in the applicable Supplement. Tenor: The tenor of a particular Series or Tranche shall be determined by the Issuer and the Issuing Houses and specified accordingly in the applicable Supplement for the Bonds being issued. Issue Price: Bonds may be issued at Par Value or at a discount to Par Value. The Issue Price of a specific Series or Tranche shall be specified in the applicable Supplement. Closing Date: The Closing Date of a specific Series or Tranche shall be stated in the applicable Supplement. Coupon: Bonds may be interest-bearing or non-interest bearing. The Coupon, if any, payable on the Bonds shall be determined by the Issuer and Issuing Houses and stated accordingly in the applicable Supplement. Frequency: The frequency of payment of interest and any other monies due on the Bonds shall be specified in the applicable Supplement. Repayment: Repayment terms in respect of the Bonds issued under the Programme shall be specified in the applicable Supplement. Day Count In case of Zero Coupon Bonds: Act/360 (actual number of days in a Month Convention: and 360 days in a Year). In case of Fixed and Floating Rate Bonds: Act/365 (actual number of days in a Month and 365 days in a Year) or Act/Act (actual number of days in a Month and actual number of days in a Year), as the case may be. Different day count conventions may be stipulated in the applicable Supplement. Principal Redemption: Bonds will be redeemed on the dates specified in the relevant Supplement. Early Redemption: Early redemption will be permitted only to the extent specified in the applicable Supplement, and subject to any applicable legal and regulatory limitations. Redemption Amount: The relevant Supplement will specify the redemption amount or, if applicable, the basis for calculating the redemption amounts payable Form of Bonds/ The Bonds will be issued in un-certificated or book entry form registered Transferability: with a separate identification code with the CSCS as specified in the applicable Supplement. Where Bonds are represented by a Certificate(s), such Certificate will be numbered serially with an identifying number recorded in the relevant Certificate and in the Register. The Bonds will be freely transferable in accordance with the provisions of the Trust Deed. Interest Rate: Bonds issued under the Programme may be issued on a fixed rate, floating rate, zero coupon, indexed rate, variable rate or reserve floating rate or as defined in the applicable Supplement.

Fixed Rate Bonds: Fixed interest will be payable semi-annually in arrears, or as specified in the relevant Supplement;

Floating Rate Bonds: will bear interest set separately for each Series by reference to a specified variable benchmark rate plus a fixed spread. The benchmark rate and the applicable spread shall be specified in the relevant Supplement; Zero Coupon Bonds: may be issued at their principal amount or at a discount and will not bear interest, other than in the case of default interest for late payment as prescribed in the relevant Supplement;

Indexed Bonds: payments of principal in respect of index redemption Bonds or of interest in respect of index linked interest Bonds will be calculated by reference to such index and/or formula or to changes in the prices of Bonds as prescribed in the relevant Supplement; Convertible Bonds: may bear a fixed rate or floating rate of interest, and have attached thereto, a right to convert such amount or holding of Bonds into fully paid ordinary shares of the Issuer as prescribed in the relevant Supplement; Exchangeable Bonds: may provide the Bondholder (and/or the Issuer) with an option to convert the Bonds or other securities into shares in a parent or subsidiary company of the Issuer as prescribed in the relevant Supplement; Variable Rate Bonds: will bear a rate of interest that varies in accordance with a pre-determined schedule as prescribed in the relevant Supplement. Interest Period(s) or Such period(s) or date(s) as shall be specified in the applicable Interest Payment Supplement. Date(s) for Floating Rate Bonds: Listing: Each Series or Tranche may be listed on the NSE and/or FMDQ platform, and/or admitted to listing, trading and/or quotation by any other listing authority, stock exchange and/or quotation system as specified in the relevant Supplement. Bonds Trading & Bonds may trade OTC or on any other recognised trading platform Liquidity: between banks and qualified market counterparties. Issuer Rating: The Issuer was assigned a rating of A- by Agusto & Co. and BBB+ by Global Credit Rating Co. Limited in July 2018. The ratings are valid for a period of one year from the date of ratings exercise, following which the ratings will be reviewed. Bonds issued under the Programme will be assigned a rating and such rating shall be indicated in the applicable Supplement. Taxation: Payments in respect of the Bonds to the Bondholders will be made without deduction for or on account of withholding taxes imposed by Nigerian law. In the event that any such deduction is made, the Issuer will be required to pay additional amounts to cover the amounts so deducted. Details of this and other tax considerations are set out on page 60 (Tax Considerations) of this Prospectus. Negative Pledge: For as long as any of the Debt Securities remains outstanding, the Issuer shall not create any mortgage, charge, pledge, lien or any encumbrance upon the whole or any part of its present or future undertaking, business, assets or revenues to secure any indebtedness for listed bonds or other listed securities, unless the Issuer’s obligations under the Debt Securities are secured equally and rateably therewith or have the benefit of such other security, guarantee, indemnity or other arrangement as the Trustees in their absolute discretion shall deem not to be materially less beneficial to the Holders. Governing Law: The Debt Issuance Programme, the Trust Deed and related documents will be governed by, and construed in accordance with the laws of Nigeria.

INFORMATION RELATED TO THE PROSPECTUS

This Prospectus has been prepared by the Issuer in connection with the N=100,000,000,000 (One Hundred Billion Naira) Debt Issuance Programme, for the purpose of giving information to the prospective investors in respect of the Bonds described herein. The SEC has cleared this Prospectus and will register the securities listed herein. The registration of this Prospectus and any Supplement by the SEC shall not be taken to indicate that the SEC endorses or recommends the Bonds to be issued under the Programme or assumes responsibility for the correctness of any statements made or opinions or reports expressed herein.

This Prospectus contains certain statements, estimates and projections with respect to the future performance of the Issuer. These statements, estimates and projections reflect various assumptions by the Issuer concerning its anticipated future performance, which have been included solely for illustrative purposes. These statements, estimates and projections should not, however, be relied upon as representations, warranties or undertakings, expressed or implied, as to the future financial condition of the Issuer, and actual occurrences may vary materially from the projected developments contained herein and/or the assumptions on which such statements, estimates and projections were based.

The receipt of this Prospectus or any information contained in it or supplied with it or subsequently communicated to any person does not constitute investment advice from the Issuing Houses to any prospective investor. Prospective investors should make their own independent assessment of the merits or otherwise of subscribing to the securities offered herein and should seek their own professional advice in connection with any prospective investment by them.

Nothing in this Prospectus should be construed to mean that the Issuing Houses are bound to provide any information coming to their attention to any Bondholder or potential investors in the Bonds. Also, no Issuing House is bound to advise any investor or potential investors on the financial condition or affairs of the Issuer during the life of the Programme contemplated therein.

TERMS AND CONDITIONS OF THE PROGRAMME

GENERAL NOTES

The Debt Securities are constituted by a trust deed (the “Programme Trust Deed”) dated 07 September 2018 between Union Bank of Nigeria PLC (the “Issuer”) and ARM Trustees Limited (“ARM Trustees) and UTL Trust Management Services Limited (UTL Trust”). (The 1st Trustee and 2nd Trustee are collectively referred to as the Trustees which expression shall include all persons for the time being appointed as trustee or trustees under the Programme Trust Deed).

Any Tranche or Series of Debt Securities which is to be created and issued pursuant to the Programme Trust Deed shall be constituted by, be subject to and have the benefit of a Series Trust Deed (the “Series Trust Deed”) between the Issuer and the Trustees. The Issuer shall execute and deliver such Series Trust Deed to the Trustees containing such provisions (whether or not corresponding to any of the provisions contained in the Programme Trust Deed) as the Trustees may require. Each Series Trust Deed shall set out the form of the Tranche of Debt Securities to be so constituted thereby and maybe accompanied by legal opinions (in form and substance satisfactory to the Trustees) or supporting authorisations/approvals as may be required by the Trustees.

The Holders are entitled to the benefit of and are bound by, and are deemed to have notice of, all the provisions of the Programme Trust Deed and the relevant Series Trust Deed applicable to them. The Programme Trust Deed and any Series Trust Deed are hereinafter collectively referred to as the Trust Deed.

These terms and conditions are extracted from, and are subject to the detailed provisions of the Programme Trust Deed. Except otherwise stated, words and expressions defined in the Programme Trust Deed shall bear the same meanings when used herein.

CONDITION 1

CURRENCY, FORM, TITLE AND DENOMINATION

(a) Issue and Currency

The Debt Securities may be issued by the Issuer in Series or Tranches pursuant to the Programme Trust Deed. A Tranche of Debt Securities may, together with a further Tranche or Tranches, form a Series of Debt Securities issued, provided that the aggregate nominal amount of all Debt Securities Outstanding under the Programme at any one point in time does not exceed the Programme Limit. The Supplementary Shelf Prospectus/Pricing Supplement for each Tranche of Debt Securities is (to the extent relevant) incorporated herein for the purposes of those Debt Securities and supplements these General Conditions.

The Supplementary Shelf Prospectus/Pricing Supplement may specify other terms and conditions which shall, to the extent so specified or to the extent inconsistent with these General Conditions, replace or modify these General Conditions for the purposes of those Debt Securities.

The Debt Securities shall be in registered form or as may be specified in the applicable Final Terms, in a specified currency and in specified denomination(s).

(b) Form and Title

Uncertificated Debt Securities

The Debt Securities shall be issued in dematerialised (book-entry) form which shall be registered with a separate securities identification code with the CSCS and each Holder shall be issued an E-allotment Notification. Each Holder shall be entitled to deal in the same in accordance with CSCS procedures and guidelines.

The CSCS Statement of Account shall be conclusive and binding for all purposes save in the case of manifest error and such person shall be treated by the Issuer, the Trustees and the

Registrar as the legal and beneficial owner of such aggregate number of Debt Securities for all purposes.

Certificated Debt Securities

A Holder may elect to receive a Certificate covering the aggregate Principal Amount of his beneficial interest in the Debt Securities PROVIDED THAT joint Holders shall be entitled to only one (1) Certificate in respect of the Debt Securities jointly held by them which Certificate shall be delivered to that one of the joint Holders whose name appears first in the Register and the delivery of a Certificate to one of such persons shall be deemed to be sufficient delivery to all.

Each Certificate will be numbered serially with an identifying number which will be recorded on the relevant Certificate and in the Register of Holders of Debt Securities of the applicable Series (“Register”) which the Issuer will procure to be kept by the Registrar.

Title to the Debt Securities passes only by registration in the Register. The Holder of any Series will (except as otherwise required by law) be treated as its legal and beneficial owner for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any interest or any writing on, or the theft or loss of, the Certificate issued in respect of it) and no person will be liable for so treating the Holder.

A Tranche of Debt Securities may be listed on the NSE, the FMDQ-OTC or on such other or further financial exchange(s) as may be determined by the Issuer, subject to any applicable laws. Unlisted Debt Securities may also be issued under the Programme. The Supplementary Shelf Prospectus/Pricing Supplement will specify whether or not a Series or Tranche of Debt Securities will be listed, on which financial exchange(s) they are to be listed (if applicable) and, if such Series or Tranche of Debt Securities are to be listed on the NSE, the relevant platform or sub-market of the NSE such Tranche of Debt Securities are to be listed.

(d) Denomination

The aggregate nominal amount, specified currency and specified denomination of a Series or Tranche of Debt Securities will be specified in the Supplementary Shelf Prospectus/Pricing Supplement.

(e) Closed Periods

No Holder may require the transfer of the Debt Securities: (i) during the period of fifteen (15) days ending on the due date for redemption of, or payment of any Coupon or Instalment Amount in respect of that Debt Security; (ii) after any Debt Security has been called for redemption by the Issuer or a Holder pursuant to Condition 4 (Redemption, Purchase and Options); or (iii) following the issuance of default notice to the Issuer by the Trustees pursuant to Condition 9 (Events of Default).

CONDITION 2

STATUS OF THE DEBT SECURITIES

(a) Status of the Senior Bonds

Unless otherwise specified in the Supplementary Shelf Prospectus/Pricing Supplement, the Senior Bonds shall constitute direct, unconditional, unsubordinated and unsecured obligations of the Issuer and shall at all times rank pari passu and without any preference or priority among themselves. The payment obligations of the Issuer under the Senior Bonds in respect of principal and any Coupon thereon shall, save for such obligations as may be preferred by applicable legislation relating to creditor’s rights, at all times rank at least equally with all other unsecured and unsubordinated indebtedness and monetary obligations of the Issuer, present and future.

(b) Status of the Subordinated Bonds

Subordinated Bonds are direct, unsecured and subordinated obligations of the Issuer and rank pari passu and without any preference among themselves and at least pari passu with the claims of all holders of Subordinated Indebtedness. The proceeds of the Subordinated Bonds will, if certified by the CBN as forming part of the Issuer’s regulatory capital, supplement the Issuer’s Tier 2 capital.

In the event of the Winding-up of the Issuer, the claims of the Trustees and the holders of Subordinated Bonds against the Issuer to payment of principal and Coupon in respect of the Subordinated Bonds will rank:

(a) subordinated in right of payment to the payment of all Senior Indebtedness; and (b) pari passu without any preference among themselves.

The provisions of this Condition 2(b) apply only to the principal and Coupon in respect of the Subordinated Bonds and nothing in this Condition 2(b) or in Condition 10 shall affect or prejudice the payment of the costs, charges, expenses, liabilities or remuneration of the Trustee or the rights and remedies of the Trustee in respect thereof.

For as long as any Subordinated Bonds certified by CBN as forming part of the Issuer’s regulatory capital remains Outstanding, the Issuer shall not exercise any right to redeem the Subordinated Bonds prior to its stated maturity (“Early Redemption”) unless:

(a) the Early Redemption will not result in the Issuer’s capital adequacy ratio falling below the regulatory minimum ratio prescribed by the CBN, and

(b) the Issuer has obtained the consent of the CBN for such Early Redemption.

Unless otherwise specified in the Supplementary Shelf Prospectus/Pricing Supplement, the Short-Term Bonds shall constitute direct, unconditional, unsubordinated and unsecured obligations of the Issuer and shall at all times rank pari passu and without any preference or priority among themselves. The payment obligations of the Issuer under the Short-Term Bonds in respect of principal and any Coupon thereon shall, save for such obligations as may be preferred by applicable legislation relating to creditor’s rights, at all times rank at least equally with all other unsecured and unsubordinated indebtedness and monetary obligations of the Issuer, present and future

CONDITION 3

COVENANTS

For as long as any of the Debt Securities remains Outstanding (as defined in the Programme Trust Deed), the Issuer shall/undertakes to comply with the following covenants:

(a) Negative Pledge

The Issuer shall not create any mortgage, charge, pledge, lien or any Encumbrance upon the whole or any part of its present or future undertaking, business, assets or revenues to secure any indebtedness for listed bonds or other listed securities, unless the Issuer’s obligations under the Debt Securities are secured equally and rateably therewith or have the benefit of such other security, guarantee, indemnity or other arrangement as the Trustees in their absolute discretion shall deem not to be materially less beneficial to the Holders. Provided that the restrictions in this Condition 3(a) will not apply to Permitted Security.

(b) Restricted Payments

The Issuer shall not declare or pay any dividend in cash or otherwise or make a distribution (whether by way of redemption, acquisition or otherwise) in respect of its share capital if an Event of Default has occurred and is continuing.

The Issuer shall not permit its total capital adequacy ratio to fall below the minimum total capital adequacy ratio required by the CBN and shall at all times comply with all Applicable Banking Regulations except where failure to so comply would not have a Material Adverse Effect.

(d) No Consolidation or Merger

Save as provided in the Programme Trust Deed, the Issuer, without the prior written consent of the Trustees (such consent not to be unreasonably withheld), shall not consolidate with or merge into any other Person (or enter into any transaction whose effect would be similar to that of a merger) or sell, convey, transfer, lease or otherwise dispose of all or substantially all of its property and assets to any Person by one or more transactions or series of transactions (whether related or not).

(e) Cessation of Business

Save as otherwise permitted in Clause 15.1.2 of the Programme Trust Deed, the Issuer shall not cease to carry on its business as a full, effective and valid going concern. The Issuer shall not engage in any business or activities not permitted under its memorandum and articles of association or relevant laws applicable to its continued corporate existence. The Issuer shall procure that no material change that would have a Material Adverse Effect is made to the nature of its business from that carried on as at the date of the relevant Series Trust Deed or conduct its business in a manner that might jeopardize the Issuer’s fulfillment of its obligations under the Trust Deed.

(f) Trustees Not Obliged to Monitor Compliance

The Issuer shall furnish the Trustees annually, with a certificate on which the Trustees may rely to confirm the Issuer’s compliance with the Conditions (including Conditions 3(b), 3(c) and 3(d)). Notwithstanding this, the Trustees are not obliged to monitor compliance by the Issuer with the Conditions (including Conditions 3(b), 3(c) and 3(d)).

CONDITION 4

REDEMPTION, PURCHASE AND OPTIONS

A Series or Tranche of Debt Securities will be redeemed on the Maturity Date in accordance with Condition 4(a) (Scheduled Redemption). If "Redemption at the option of the Issuer (Call Option)" and/or "Redemption at the option of the Bondholders of Bonds (Put Option)" is specified as applicable in the Supplementary Shelf Prospectus/Pricing Supplement, a Tranche of Debt Securities may, or upon the occurrence of an Event of Default as set out in Condition 9 (Events of Default) be redeemed prior to its Maturity Date in accordance with this Condition 4 (Redemption, Purchase and Options).

(a) Scheduled Redemption

Unless previously redeemed or purchased and cancelled as specified below, the Debt Securities will be redeemed at the Final Redemption Amount on the Maturity Date subject to the provisions contained in Condition 5 (Payments).

(b) Redemption by Instalments and Final Redemption

(i) Unless previously redeemed, purchased and cancelled as provided in this Condition 4, Debt Securities of a Series or Tranche that provide for Instalment Dates and Instalment Amounts shall be partially redeemed on each Instalment Date at the related Instalment Amount specified in respect of such Debt Securities. The outstanding nominal amount of such Debt Securities shall be reduced by the Instalment Amount (or, if such Instalment Amount is calculated by reference to a proportion of the nominal amount of such Debt Securities, such proportion) for all purposes with effect from the related Instalment Date, unless payment of the Instalment Amount is improperly withheld or refused, in which case, such amount shall remain outstanding until the Relevant Date

relating to such Instalment Amount. The Registrar shall update the Register to reflect the amount outstanding within 5 Business Days of the Instalment Date.

(ii) “Instalment Amount” means the portion of the Principal Amount payable on a date specified in the applicable Final Terms (the “Instalment Date”)

(iii) Unless previously redeemed, purchased and cancelled as provided below, the Debt Securities shall be finally redeemed on the Maturity Date specified in the relevant Final Terms at its Final Redemption Amount (which, unless otherwise provided in respect of the Debt Securities, is its nominal amount) or, in the case of Debt Securities falling within paragraph (i) above, its final Instalment Amount.

The Early Redemption Amount payable in respect of Debt Securities of a Series (upon redemption of such Debt Securities pursuant to Condition 4(c) or upon it becoming due and payable as provided in Condition 9 (Events of Default), shall be the Final Redemption Amount unless otherwise specified in the Final Terms in respect of the Debt Securities.

(d) Redemption at the Option of the Issuer (Call Option)

If the Issuer is specified in the Supplementary Shelf Prospectus/Pricing Supplement as having an option to redeem, the Debt Securities may, be redeemed at the option of the Issuer in whole or, if so specified in the Supplementary Shelf Prospectus/Pricing Supplement, in part, upon the Issuer, having given:

(i) not less than thirty (30) and not more than sixty (60) days, or such other period as specified in the Supplementary Shelf Prospectus/Pricing Supplement, notice to the Holders in accordance with Condition 13 (Notices); and

(ii) not less than seven (7) days before giving the notice referred to above, to redeem all or some of the Debt Securities then Outstanding on the Optional Redemption Date(s) (Call) and at the Optional Redemption Amount(s) (Call) specified in, or determined in the manner specified in, the Supplementary Shelf Prospectus/Pricing Supplement together, if appropriate, with Coupon accrued up to (but excluding) the Optional Redemption Date(s) (Call).

(iii) Any such redemption amount must be of a nominal amount equal to or greater than the Minimum Redemption Amount or equal to or less than the Maximum Redemption Amount, both as specified in the Supplementary Shelf Prospectus/Pricing Supplement, if applicable. In the case of a partial redemption of Debt Securities, the Debt Securities to be redeemed (Redeemable Debt Securities) will be selected individually by lot; and in each such case not more than thirty (30) days prior to the date fixed for redemption (such date of selection being hereinafter called the Selection Date).

A list of the serial numbers of the Individual Certificates will be published in accordance with Condition 13 (Notices) not less than 10 (ten) days prior to the date fixed for redemption.

Holders of Redeemable Debt Securities shall surrender the Individual Certificates, together with Receipts and Coupon (if any) relating to the Debt Securities in accordance with the provisions of the notice given to them by the Issuer. Where only a portion of the Debt Securities represented by such Certificates, Receipts and Coupon (as applicable) are redeemed, the Registrar shall deliver new Individual Certificates, Receipts and Coupon (as applicable) to such Holders in respect of the balance of the Debt Securities.

(e) Redemption of the Subordinated Bonds at the Option of the Issuer following a Capital Disqualification Event

At any time, if a Capital Disqualification Event occurs, the Issuer may, at its option, having given not less than thirty (30) nor more than sixty (60) days' notice to the Holders (which notice shall be irrevocable and shall specify the date fixed for redemption), redeem the Subordinated Bonds, subject to having obtained the prior approval of the CBN if required pursuant to the Applicable

Banking Regulations, at any time at its principal amount then outstanding together with Coupon accrued to but excluding the date of redemption. Prior to the publication of any notice of redemption pursuant to this Condition, the Issuer shall deliver to the Trustees (i) a copy of the circular, notification, directive or other official policy communique evidencing such Capital Disqualification Event (a “CBN Communication”) and (ii) a certificate signed by two directors of the Issuer stating that (A) the Issuer has consulted with the CBN following the release of the relevant CBN Communication and (B) a Capital Disqualification Event has occurred.

(f) Redemption for Taxation Reasons

If so specified in the Supplementary Shelf Prospectus/Pricing Supplement, the Debt Securities may be redeemed at the option of the Issuer in whole, or in part,

(i) at any time (if neither the Floating Rate Debt Securities provisions nor the Indexed Debt Securities provisions are specified in the Supplementary Shelf Prospectus/Pricing Supplement as being applicable or, if they are, such provisions are not applicable at the time of redemption); or

(ii) on any Coupon Payment Date (if the Floating Rate Debt Securities Provisions or the Indexed Debt Securities provisions are specified in the Supplementary Shelf Prospectus/Pricing Supplement as being applicable and are applicable at the time of redemption),

(iii) on giving not less than thirty (30) nor more than sixty (60) days’ notice to the Holders (which notice shall be irrevocable) at their Early Redemption Amount together with the Coupon accrued to the date fixed for redemption, if:

(a) the Issuer satisfies the Trustees and the SEC immediately prior to the giving of such notice that it has or will become obliged to pay additional amounts as a result of any change in, or amendment to, the laws or regulations of the Federal Republic of Nigeria or any political subdivision or any authority thereof or therein having power to tax (other than the expiry of the Companies Income Tax Act 2004 exemption in respect of the Debt Securities set out in the Companies Income Tax (Exemption of Bonds and Short Term Government Securities) Order, 2011 in relation to Debt Securities with a maturity date later than January 2, 2022), or any change in the application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after the date on which agreement is reached to issue the Series or Tranche of the Debt Securities; and

(b) such obligation cannot be avoided by the Issuer taking reasonable measures available to it, provided that no such notice of redemption shall be given earlier than ninety (90) days prior to the earliest date on which the Issuer would be obliged to pay such additional amounts were a payment in respect of the Debt Securities then due. Prior to the publication of any notice of redemption pursuant to this paragraph, the Issuer shall deliver to the Trustees and the SEC a certificate signed by two (2) Directors stating that the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer so to redeem have occurred.

Provided, however, that no such notice of redemption shall be given earlier than:

(i) where the Debt Securities may be redeemed at any time, ninety (90) days prior to the earliest date on which the Issuer would be obliged to pay such additional amounts or would be entitled (as such entitlement is materially reduced) to claim a deduction in respect of computing its taxation liabilities; or

(ii) where the Debt Securities may be redeemed only on a Coupon Payment Date, sixty (60) days prior to the Coupon Payment Date occurring immediately before the earliest date on which the Issuer would be obliged to pay such additional amounts or would not be entitled (or such entitlement is materially reduced) to claim a deduction in respect of computing its taxation liabilities.

CONDITION 5

PAYMENTS

(a) Only Holders named in the Register at the close of business on the fifteenth day (whether or not such fifteenth day is a Business Day) before the relevant due date (the “Record Date”) shall be entitled to payment of amounts due and payable in respect of Debt Securities.

(b) Payments of an Instalment Amount (where applicable), the Principal Amount, Periodic Distribution, final Instalment Amount and Coupon (where applicable) will be made in the relevant currency and by credit/electronic funds transfer to the specified bank account of the Holder. Provided however that the Issuer shall withhold amounts due to a Holder until a bank account is specified in writing by the Holder and the Holder shall not be entitled to any further Coupon, return or other payment in respect of any such delay. Coupon or returns on Debt Securities due will be paid to the Holder shown on the Register of Debt Securities of a Series at the close of business on the Record Date. The Holder shall be the only person entitled to receive payments in respect of Debt Securities and the Issuer will be discharged by payment to, or to the order of, the Holder in respect of each amount so paid.

(c) If the Issuer is prevented or restricted directly or indirectly from making any payment by electronic funds transfer in accordance with the preceding paragraph (whether by reason of strike, lockout, fire, explosion, floods, riot, war, accident, act of God, embargo, legislation, shortage of or breakdown in facilities, civil commotion, unrest or disturbances, cessation of labour, Government interference or control or any other cause or contingency beyond the control of the Issuer), the Issuer shall make such payment by cheque (or by such number of cheques as may be required in accordance with Applicable Banking Regulation and practice) of any such amounts made payable to the relevant Holder. Such payments by cheque shall be sent by registered post to the address of the Holder of registered Debt Securities as set forth in the Register or, in the case of joint Holders of Registered Debt Securities, the address set forth in the Register of that one of them who is first named in the Register in respect of that Debt Security. Payment by electronic transfer to the Holder first named in the Register shall discharge the Issuer of its relevant payment obligations under the Debt Securities. Cheques may be posted by registered post, provided that the Issuer shall not be responsible for any loss in transmission and the postal authorities shall be deemed to be the agent of the Holders for the purposes of all cheques posted in terms of this Condition 5(c) (Payments).

(d) If the due date for payment of any amount in respect of the Debt Securities is not a Business Day, then the Holder thereof shall not be entitled to payment of the amount due until the following Business Day unless the day falls in the next calendar month, in which case the due date will be the immediately preceding day that is a Business Day, and the Holder shall not be entitled to any further Coupon, return or other payment in respect of any such delay. For the purpose of this Condition, “Business Day” means any day, other than a Saturday, Sunday or a Federal Government declared public holiday, on which banks are open for business in the Federal Republic of Nigeria and in the case of transfer to or from an account held by a non- resident Investor, in the place where such bank account is maintained.

(e) All payments of all amounts (whether in respect of principal, Coupon or otherwise) due and payable in respect of any Debt Securities shall be made by the Trustees from the Designated Accounts on behalf of the Issuer.

(f) Interpretation of the Principal Amount:

(i) Any reference in the General Conditions to the Principal Amount in respect of the Debt Securities shall be deemed to include, as applicable any additional amounts which may be payable with respect to the Principal Amount under any undertaking or covenant given in addition thereto, or in substitution therefore, pursuant to the Programme Trust Deed;

(a) the Final Redemption Amount of the Debt Securities;

(b) the Early Redemption Amount of the Debt Securities;

(d) in relation to Debt Securities redeemable in instalments, the Instalment Amounts; and

(e) any premium and any other amounts (other than Coupon) which may be payable by the Issuer under or in respect of the Debt Securities.

CONDITION 6

TRANSFER OF DEBT SECURITIES

(a) Transfer of Debt Securities

All Debt Securities issued pursuant to the Programme Trust Deed shall be transferable subject to the provisions for registration of transfers contained therein.

Any Person becoming entitled to registered Debt Securities in consequence of the death or liquidation of the Holder of such Debt Securities may, upon producing evidence to the satisfaction of the Issuer that he holds the position in respect of which he proposes to act under this Condition 6 or of his title as the Issuer shall require, be registered himself as the holder of such Debt Securities or, subject to any procedure/requirements the Issuer shall require and the provisions on transfer, may transfer such Debt Securities.

The Register shall be maintained at the offices of the Registrar and the Registrar shall provide for the registration of any Debt Securities with respect to each Tranche or Series of Debt Securities or its transfer under such reasonable regulations as the Registrar with the approval of the Issuer and the Trustees may prescribe.

The Register shall reflect the number of registered Debt Securities issued and Outstanding, the date upon which each of the Holders was registered as such. The Register shall contain the name, address, and bank account details of the Holders of the registered Debt Securities. The Register shall set out the Nominal Amount of the Debt Securities issued to such Holders and shall show the date of such issue. The Register shall show the serial number of Individual Certificates issued in respect of any Debt Securities. The Register shall be open for inspection during the normal business hours of the Registrar to any Holder or any person authorised in writing by any Holder.

Each Tranche or Series shall be registered in the applicable Register. Any transfer of Debt Securities represented by a Certificate shall be effective only to the extent that such transfer is registered in the Register, by the Holder or transferee thereof in person or by his attorney duly authorised in writing, upon presentation and surrender of the Certificate (if the Debt Securities are issued in physical form) together with a written instrument of transfer in a form satisfactory to the Registrar duly executed by or on behalf of the registered Holder and the transferee by a duly authorised attorney. Upon surrender of the aforesaid documents to facilitate the registration of transfer of Debt Securities, the Registrar shall if the above stated conditions are met, register such transfer, and deliver a new Certificate (if any) to the transferee as appropriate.

The transfer of Debt Securities in dematerialised (book entry) form shall be regulated by the CSCS procedures and guidelines.

The Register shall be closed during such periods, not exceeding an aggregate of thirty (30) days in any year.

(b) Prohibition on Stripping

Where so specified in the Supplementary Shelf Prospectus/Pricing Supplement, Debt Securities which shall be issued subject to the condition that the relevant Debt Securities (including rights to Instalment Amounts and/or Coupon thereon, as applicable) may only be transferred to a single transferee at a time and accordingly that the various rights in respect of such Debt Securities may not be stripped and transferred to various transferees at different times.

Stripping of Debt Securities is otherwise permitted.

CONDITION 7

TAXATION

Pursuant to the Companies Income Tax (Exemption of Bonds and Short Term Government Securities) Order, 2011, and the Value Added Tax (Exemption of Proceeds of Disposal of Government and Corporate Securities) Order 2011, corporate bonds are exempted from taxes ordinarily imposed under the Companies Income Tax Act and as well as from the imposition of Value Added Tax respectively, for a period of 10 years from the date the orders became effective (being January 2, 2012). The Debt Securities are also exempt from VAT payable on commissions on stock exchange transactions by virtue of the Value Added Tax (Exemption of Commissions on Stock Exchange Transactions) Order, 2014, accordingly commissions payable to the SEC, NSE and CSCS will not be subject to VAT until July 24, 2019. Furthermore, by virtue of the Personal Income Tax (Amendment) Act 2011, corporate bonds are also exempt from personal income tax. Therefore, all amounts payable under the Debt Securities will be paid without deduction or withholding for or on account of any income tax. Thus, the Issuer will not be required by law to withhold tax on Coupon payments to the Holders. In relation to Debt Securities with a maturity date later than January 2, 2022, the Issuer may be required by law, to withhold tax on Coupon payments to the Holders.

The relevant Series Trust Deed will indicate the tax consequences of investment in the relevant Series or Tranche of Debt Securities.

CONDITION 8

PRESCRIPTION

Claims against the Issuer for payment in respect of the Debt Securities shall be prescribed and become void unless made within six (6) years from the appropriate Relevant Date in respect of the Principal and Coupon.

As used in these General Conditions, “Relevant Date” in respect of any payment means the date on which such payment first becomes due or (if any amount of the money payable is improperly withheld or refused) the date on which payment in full of the amount outstanding is made or (if earlier) the date seven (7) days after that on which notice is duly given to the Holders that such payment will be made.

CONDITION 9

EVENTS OF DEFAULT

Upon the happening of any of the following events (“Events of Default”), the Issuer shall forthwith notify all the Holders and the Trustees. The Trustees at their discretion may, and if so requested in writing by Holders of at least one-tenth in principal amount of the Debt Securities of the relevant Series then outstanding, or if so directed by a Special Resolution of the Holders of the Debt Securities of the relevant Series, shall give written notice to the Issuer at its specified office, effective upon the date of receipt thereof by the Issuer, that an Event of Default has occurred and that the Debt Securities are immediately due and repayable, whereupon the Early Redemption Amount (if any) of the Debt Securities together with any accrued interest to the date of payment shall become immediately due and payable:

(i) Non-Payment: default is made in the payment on the due date of the Principal Amount in respect of the Debt Securities; or

(ii) Non-Payment of Coupon: default is made in the payment on the due date of Coupon in respect of the Debt Securities; provided that non-payment as a result of a technical or administrative error which is remedied within five (5) Business Days shall not be deemed an Event of Default; or

(iii) Breach of Other Obligations: the Issuer does not perform or comply with any one or more of its other obligations in the Debt Securities or the Programme Trust Deed which default is incapable of remedy or is not remedied within thirty (30) days after written notice of such default shall have been given to the Issuer by the Trustees at their specified office; or

(iv) Cross-Default: (A) any other present or future indebtedness of the Issuer for or in respect of moneys borrowed or raised becomes due and payable prior to its stated maturity by reason of any default on the part of the Issuer, or (B) any such indebtedness is not paid when due or, as the case may be, within any applicable grace period, or (C) the Issuer fails to pay when due any amount payable by it under any present or future guarantee for, or indemnity in respect of, any moneys borrowed or raised provided that the aggregate amount of the relevant indebtedness, guarantees and indemnities in respect of one or more of the events mentioned above in this paragraph (iii) have occurred and equals or exceeds U.S.$10,000,000 (Ten Million United States Dollars) (or its Naira equivalent using the CBN’s official exchange rate on the relevant date); or

(v) Enforcement Proceedings: a distress, attachment, execution or other legal process is levied, enforced or commenced against the property, assets or revenues of the Issuer, where the value of such property, assets or revenue exceeds U.S.$15,000,000 (Fifteen Million United States Dollars) (or its Naira equivalent using the CBN’s official exchange rate on the relevant date), and such distress, attachment, execution or other legal process is not discharged or stayed within one hundred and eighty (180) days; or

(vi) Withdrawal of Licence: the banking licence of the Issuer is terminated, revoked or suspended and is not replaced or any licence from any governmental authority which the Issuer holds and which is necessary for it to carry on its business, is terminated, revoked or suspended and in any such case is not replaced within one hundred and eighty (180) days thereafter; or

(vii) Security Enforced: any mortgage, charge, pledge, lien or other encumbrance, present or future, created or assumed by the Issuer over a material part of the Issuer’s property, assets or revenues, becomes enforceable and any step is taken to enforce it (including the taking of possession or the appointment of a receiver, manager or other similar person); or

(viii) Insolvency: the Issuer is, or is deemed by law or a Court to be insolvent or unable to pay its debts, stops, suspends or threatens to stop or suspend payment of all or a material part of (or of a particular type of) its debts, proposes or makes a general assignment or an arrangement or composition with or for the benefit of the relevant creditors in respect of any of such debts or a moratorium is agreed or declared in respect of or affecting all or any part of (or of a particular type of) the debts of the Issuer; or

(ix) Winding-up: an order is made or an effective resolution passed for the winding-up or dissolution of the Issuer, or the Issuer shall apply or petition for a winding-up or administration order in respect of itself or ceases or through an official action of its board of Directors threaten to cease to carry on all or a substantial part of its business or operations, in each case except for the purpose of and followed by a reconstruction, amalgamation, reorganisation, merger or consolidation on terms approved by the Trustees or by a Special Resolution of the Holders; or

(x) Failure to take action: any action, condition or thing (including the obtaining of any consent, licence, approval or authorisation) now or hereafter necessary to enable the Issuer to comply with their obligations under the Programme Trust Deed for the issuance of the Debt Securities is not taken, fulfilled or done, or any such consent,

licence, approval or authorisation shall be revoked, modified, withdrawn or withheld or shall cease to remain in full force and effect, resulting in the Issuer being unable to perform any of their obligations in terms of the Debt Securities or the Programme for the issuance of the Debt Securities; or

(xi) Nationalisation: any step is taken by any person with a view to the seizure, compulsory acquisition, expropriation or nationalisation of all or a material part of the assets of the Issuer.

CONDITION 10

ENFORCEMENT

(a) The Trustees may, at any time, at their discretion and without notice institute such proceedings as they think fit to enforce their rights under the Trust Deed in respect of the Debt Securities of a relevant Series including the repayment of the Debt Securities at any time after the Debt Securities shall have become repayable under the terms of issue (including pursuant to Condition 9 (Events of Default), but shall not be bound to do so unless:

(i) they have been so requested in writing by the Holders of not less than one fifth in principal amount of the outstanding Debt Securities of a relevant Series or has been so directed by a Special Resolution passed at a meeting of the Holders convened in accordance with clause 1.2 of Schedule 1 of this Deed; and (ii) they have been indemnified, prefunded and/or secured to their satisfaction.

(b) No Holder shall be entitled to proceed directly against the Issuer to enforce the provisions of the Trust Deed unless the Trustees having become bound so to proceed, fail so to do within fourteen (14) Business Days and the failure shall be continuing, in which case the Holder, shall have only such rights against the Issuer as those which the Trustees are entitled to exercise.

(c) The Trustees or the Holders shall be entitled to all remedies available under the law for the recovery of amounts owing in respect of the Debt Securities or under the Trust Deed.

(d) The Trustees shall also file a notice of any default and remedies being pursued with the SEC within ten (10) days of the occurrence of an Event of Default.

(e) If the Floating Rate Bonds or Index Linked Coupon Bonds of any Series become immediately due and repayable under Condition 9 (Events of Default) the rate and/or amount of coupon payable in respect of them will be calculated by a calculation agent (where so specified in the applicable Supplementary Shelf Prospectus/Pricing Supplement) (the “Calculation Agent”) at the same intervals as if such Bonds had not become due and repayable, the first of which will commence on the expiry of the Coupon Period during which the Bonds of the relevant Series become so due and repayable mutatis mutandis in accordance with the provisions of Condition 11 (Coupon and Other Calculations) except that the rates of Coupon need not be published.

(f) Upon the occurrence of an Event of Default, the Trustees shall at their discretion be entitled to liquidate the Designated Accounts and or Permitted Investments for the payment of the amounts outstanding on the Debt Securities, provided however that the Trustees shall only be obliged to distribute to the Holders up to the extent of such amounts as they realise from the Designated Accounts or disposal of the Permitted Investments and such amounts shall be applied to meet the obligations of the Issuer in accordance with the Programme Trust Deed and the applicable Series Trust Deed.

CONDITION 11

COUPON AND OTHER CALCULATIONS

If the Supplementary Shelf Prospectus/Pricing Supplement so specifies, the Debt Securities of any Tranche will bear Coupon from the Coupon Commencement Date at the Coupon Rate(s) specified in,

or determined in accordance with, the Supplementary Shelf Prospectus/Pricing Supplement and such Coupon will be payable in respect of each Coupon Period on the Coupon Payment Date(s) specified in the Supplementary Shelf Prospectus/Pricing Supplement. The Coupon payable on the Debt Securities of any Series or Tranche for a period other than a full Coupon Period shall be determined in accordance with the Supplementary Shelf Prospectus/Pricing Supplement.

(a) Coupon on Fixed Rate Debt Securities

Coupon on Fixed Rate Debt Securities will be paid on the Coupon Payment Dates specified in the Supplementary Shelf Prospectus/Pricing Supplement.

Accrual of Coupon

The Debt Securities shall bear Coupon from the Coupon Commencement Date at the Coupon Rate payable in arrears on each Coupon Payment Date, subject as provided in Condition 5 (Payments). Each Debt Securities will cease to bear Coupon from the relevant Coupon Termination Date.

Fixed Coupon Amount

The Coupon Amount payable in respect of each Debt Security for any Coupon Period shall be the relevant Fixed Coupon Amount and, if the Debt Securities are in more than one Specified Denomination, shall be the relevant Fixed Coupon Amount in respect of the relevant Specified Denomination.

Calculation of Coupon Amount

The amount of coupon payable in respect of each Debt Securities for any period for which a Fixed Coupon Amount is not specified shall be calculated by applying the Coupon Rate to the Calculation Amount, multiplying the product by the relevant Day Count Fraction and rounding the resulting figure to the nearest sub-unit of the specified currency (half a sub-unit being rounded upwards) and multiplying such rounded figure by a fraction equal to the specified denomination of such Debt Security divided by the Calculation Amount, provided that:

(i) if an Initial Broken Amount is specified in the Supplementary Shelf Prospectus/Pricing Supplement, then the first Coupon Amount shall equal the Initial Broken Amount specified in the Supplementary Shelf Prospectus/Pricing Supplement; and

(ii) if a Final Broken Amount is specified in the Supplementary Shelf Prospectus/Pricing Supplement, then the final Coupon Amount shall equal the Final Broken Amount specified in the Supplementary Shelf Prospectus/Pricing Supplement.

(b) Coupon on Floating Rate Debt Securities and Indexed Debt Securities

Accrual of Coupon

The Debt Securities shall bear Coupon from the Coupon Commencement Date on the outstanding nominal amount at the Coupon Rate payable in arrears on each Coupon Payment Day, subject as provided in Condition 5 (Payments). Each Debt Security will cease to bear Coupon from the Coupon Termination Date.

Floating Coupon Rate

The Floating Coupon Rate which is applicable to a Series or Tranche of Floating Rate Debt Securities for a Coupon Period will be determined in the manner specified in the relevant Supplementary Shelf Prospectus/Pricing Supplement.

Indexed Coupon

If the Indexed Coupon Debt Security provisions are specified in the Supplementary Shelf Prospectus/Pricing Supplement as being applicable, the Coupon Rate(s) applicable to the Debt Securities for each Coupon Period will be determined in accordance with the manner specified in the Supplementary Shelf Prospectus/Pricing Supplement.

Maximum and/or Minimum Coupon Rate

If the Supplementary Shelf Prospectus/Pricing Supplement specifies a Maximum Coupon Rate for any Coupon Period, then the Coupon Rate for such Coupon Period shall in no event be greater than such Maximum Coupon Rate and/or if it specifies a Minimum Coupon Rate for any Coupon Period, then the Coupon Rate for such Coupon Period shall in no event be less than such Minimum Coupon Rate.

Determination of Floating Coupon Rate and Calculation of Coupon Amount

The Trustees, in the case of Floating Rate Debt Securities will, at or as soon as practicable after each time at which the Coupon Rate is to be determined in relation to each Coupon Period, procure the calculation of or calculate the Coupon Amount payable in respect of each Debt Securities for such Coupon Period. The Coupon Amount will be calculated by applying the Coupon Rate for such Coupon Period to the Calculation Amount and multiplying the product by the relevant Day Count Fraction, rounding the resulting figure to the nearest sub-unit of the specified currency (half a sub-unit being rounded upwards) and multiplying such rounded figure by a fraction equal to the specified denomination of the relevant Debt Security divided by the Calculation Amount.

Calculation of Other Amounts

If the Supplementary Shelf Prospectus/Pricing Supplement specifies that any other amount is to be calculated (by the Calculation Agent, if any), the Calculation Agent will, as soon as practicable after the time or times at which any such amount is to be determined, calculate the relevant amount. The relevant amount will be calculated by the Calculation Agent in the manner specified in the Supplementary Shelf Prospectus/Pricing Supplement.

Publication

The Calculation Agent, if any, will cause each Coupon Rate determined by it, together with the relevant Coupon Payment Date, and any other amount(s) required to be determined by it, together with any relevant payment date(s) to be notified to the Issuer, the Trustees, any Exchange on which the relevant Floating Rate Debt Securities are for the time being listed, as soon as possible after their determination and in any event not later than the later of the day that is three (3) Business Days before the relevant Coupon Payment Date and the relevant Coupon Determination Date for that Coupon Period. Notice thereof shall also promptly be given to the Holders in accordance with Condition 13 (Notices).

Each Coupon Rate determined by the Calculation Agent, together with the relevant Coupon Payment Date, and any other amount(s) required to be determined by it, together with any relevant payment date(s) shall be made available to the Holders in respect of any unlisted Floating Rate Debt Securities promptly upon request.

The Calculation Agent will be entitled to recalculate any Coupon Amount (on the basis of the foregoing provisions) without notice in the event of an extension or shortening of the relevant Coupon Period. Any such amendment will be promptly notified to the Issuer, the Trustees and to the Holders in accordance with Condition 13 (Notices) and, the relevant Exchange where the Tranche of Debt Securities is listed. If the Calculation Amount is less than the minimum Specified Denomination the Calculation Agent shall not be obliged to publish each Coupon Amount but instead may publish only the Calculation Amount and Coupon Amount in respect of a Debt Security having the minimum Specified Denomination.

The Coupon Rate payable from time to time on Mixed Rate Debt Securities shall be the Coupon Rate payable on any combination of Fixed Rate Debt Securities, Floating Rate Debt Securities, or Indexed Debt Securities for respective periods, each as specified in the Supplementary Shelf Prospectus/Pricing Supplement. During each such applicable period, the Coupon Rate on the Mixed Rate Debt Securities shall be determined and fall due for payment on the basis that and to the extent that such Mixed Rate Debt Securities are Fixed Rate Debt Securities, Floating

Rate Debt Securities, Zero-coupon Debt Securities, or Indexed Debt Securities, as the case may be.

(d) Coupon on Partly Paid Debt Securities

In the case of Partly Paid Debt Securities, coupon will accrue on the paid-up Nominal Amount of such Debt Securities and otherwise as specified in the Supplementary Shelf Prospectus/Pricing Supplement from the Coupon Commencement Date to the Coupon Termination Date.

(e) Coupon on Instalment Debt Securities

In the case of Instalment Debt Securities, Coupon will accrue on the amount outstanding on the relevant Debt Securities from time to time and otherwise as specified in the Supplementary Shelf Prospectus/Pricing Supplement from the Coupon Commencement Date to the Coupon Termination Date.

(f) Coupon on Unpaid Amounts

Each Debt Security (or in the case of the redemption of part only of a Debt Security, that part only of such Debt Security) will cease to bear coupon (if any) from the Coupon Termination Date. If on the date of redemption and upon due presentation of the Debt Security, payment of principal is improperly withheld or refused, coupon shall accrue at the rate specified in the Supplementary Shelf Prospectus/Pricing Supplement from the date on which such amount is due and payable until the date on which all amounts due in respect of such Debt Securities have been paid.

(g) Business Day Convention: If any date referred to in these Conditions that is specified to be subject to adjustment in accordance with a Business Day Convention would otherwise fall on a day that is not a Business Day, then, if the Business Day Convention specified is (A) the Floating Rate Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event (i) such date shall be brought forward to the immediately preceding Business Day and (ii) each subsequent such date shall be the last Business Day of the Month in which such date would have fallen had it not been subject to adjustment, (B) the Following Business Day Convention, such date shall be postponed to the next day that is a Business Day, (C) the Modified Following Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event such date shall be brought forward to the immediately preceding Business Day or (D) the Preceding Business Day Convention, such date shall be brought forward to the immediately preceding Business Day.

(h) Margin, Maximum/Minimum Rates of Coupon, Instalment Amounts and Redemption Amounts Rate Multipliers and Rounding

(i) If any Margin or Rate Multiplier is specified in respect of the Debt Securities (either (i) generally, or (ii) in relation to one or more Coupon Accrual Periods), an adjustment shall be made to all Rates of Coupon, in the case of (i),or the Rates of Coupon for the specified Coupon Accrual Periods, in the case of (ii), calculated in accordance with Condition 11(d) above by adding (if a positive number) or subtracting the absolute value (if a negative number) of such Margin or multiplying by such Rate Multiplier, subject always to the next paragraph.

(ii) If any Maximum or Minimum Rate of Coupon, Instalment Amount or Redemption Amount is specified in respect of the Debt Securities, then any Rate of Coupon, Instalment Amount or Redemption Amount shall be subject to such maximum or minimum, as the case may be.

(iii) For the purposes of any calculations required pursuant to these Conditions (unless otherwise specified): (i) all percentages resulting from such calculations shall be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point (with halves being rounded up); (ii) all figures shall be rounded to seven significant figures (with halves being rounded up); and (iii) all currency amounts that fall due and

payable shall be rounded to the nearest unit of such currency (with halves being rounded up. For these purposes, “unit” means the lowest amount of such currency that is available as legal tender, in the country of such currency.

(i) Calculations

The Coupon payable in respect of any Debt Securities for any Coupon Accrual Period shall be calculated by multiplying the product of the Rate of Coupon and the calculation amount as specified in the applicable Supplementary Shelf Prospectus/Pricing Supplement (“the Calculation Amount”) by the Day Count Fraction for such Coupon Accrual Period, unless a Coupon Amount (or formula for its calculation) is specified in respect of such Coupon Accrual Period, in which case the Coupon Amount payable per Calculation Amount in respect of such Debt Securities for such Coupon Accrual Period shall equal such Coupon Amount (or be calculated in accordance with such formula). Where any Coupon Period comprises two or more Coupon Accrual Periods, the Coupon Amount payable per Calculation Amount in respect of such Coupon Period shall be the sum of the Coupon Amount payable in respect of each of those Coupon Accrual Periods. In respect of any other period for which Coupon is required to be calculated, the provisions above shall apply save that the Day Count Fraction shall be for the period for which Coupon is required to be calculated.

“Day Count Fraction” means, in respect of the calculation of an amount of Coupon on Debt Securities of a Series for any period of time (from and including the first day of such period to but excluding the last) (whether or not constituting a Coupon Period or latest Accrual Period, the “Calculation Period”):

(i) if “Actual/365” or “Actual/Actual-ICMA” is specified in respect of the Debt Securities, the actual number of days in the Calculation Period divided by 365 (or, if any portion of that Calculation Period falls in a leap year, the sum of (A) the actual number of days in that portion of the Calculation Period falling in a leap year divided by 366 and (B) the actual number of days in that portion of the Calculation Period falling in a non-leap year divided by 365);

(ii) if “Actual/365 (Fixed)” is specified in respect of Debt Securities of a Series, the actual number of days in the Calculation Period divided by 365;

(iii) if “Actual/360” is specified in respect of Debt Securities of a Series, the actual number of days in the Calculation Period divided by 360;

(iv) if “30/360”, “360/360” or “Bonds Basis” is specified in respect of the Debt Securities, the number of days in the Calculation Period divided by 360 (the number of days to be calculated on the basis of a year of 360 days with 12 30-day months (unless (a) the last day of the Calculation Period is the 31st day of a month but the first day of the Calculation Period is a day other than the 30th or 31st day of a month, in which case the month that includes that last day shall not be considered to be shortened to a 30- day month, or (b) the last day of the Calculation Period is the last day of the month of February, in which case the month of February shall not be considered to be lengthened to a 30-day month);

(v) if “30E/360” is specified in respect of the Debt Securities, the number of days in the Calculation Period divided by 360 (the number of days to be calculated on the basis of a year of 360 days with 12 30-day months, without regard to the date of the first day or last day of the Calculation Period unless, in the case of a Calculation Period ending on the Maturity Date, the Maturity Date is the last day of the month of February, in which case the month of February shall not be considered to be lengthened to a 30-day month);

and

(vi) if “Actual/Actual” is specified in respect of the Debt Securities:

(a) if the Calculation Period is equal to or shorter than the Determination Period during which it falls, the number of days in the Calculation Period divided by the product of (x) the number of days in such Determination Period and (y) the

number of Determination Periods normally ending in any year; and (b) if the Calculation Period is longer than one Determination Period, the sum of: (x) the number of days in such Calculation Period falling in the Determination Period in which it begins divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Periods normally ending in any year; and (y) the number of days in such Calculation Period falling in the next Determination Period divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Periods normally ending in any year,

where:

“Coupon Accrual Period” means the period beginning on (and including) the Coupon Commencement Date and ending on (but excluding) the first Coupon Period Date and each successive period beginning on (and including) a Coupon Period Date and ending on (but excluding) the next succeeding Coupon Period Date.

“Coupon Amount” means

(i) in respect of a Coupon Accrual Period, the amount of Coupon payable per Calculation Amount for that Coupon Accrual Period and which, in the case of Fixed Rate Debt Securities, and unless otherwise specified hereon, shall mean the Fixed Coupon Amount or Broken Amount specified hereon as being payable on the Coupon Payment Date ending the Coupon Period of which such Coupon Accrual Period forms part; and

(ii) in respect of any other period, the amount of Coupon payable per Calculation Amount for that period.

“Coupon Determination Date” means, with respect to a Rate of Coupon and Coupon Accrual Period, the date specified as such in respect of the Debt Securities.

“Coupon Period Date” means each Coupon Payment Date unless otherwise specified in the Supplementary Shelf Prospectus/Pricing Supplement.

“Coupon Rate” or “Rate of Coupon” means the rate of interest payable from time to time in respect of Coupon bearing Debt Securities of a Series or Tranche and that is either specified or calculated in accordance with the provisions in respect of such Debt Securities.

“Determination Date” means the date specified in respect of the Coupon of a Series or, if none is so specified, the Coupon Payment Date.

“Determination Period” means the period from and including a Determination Date in any year to but excluding the next Determination Date.

CONDITION 12

REPLACEMENT OF CERTIFICATES

If any Certificate is lost, stolen, mutilated, defaced or destroyed, it may be replaced at the specified office of the Registrar upon payment by the claimant of such costs and expenses as may be incurred in connection therewith and on such terms as to evidence and indemnity as the Issuer and/or Registrar may reasonably require. Mutilated or defaced Certificates must be surrendered before replacements will be issued.

CONDITION 13

NOTICES

(a) Notices to the Holders

All notices to the Holders will be valid if mailed to them at their respective addresses of record in the relevant register of Debt Securities of a Series maintained by the Registrar. The Issuer shall also ensure that notices are duly given or published in a manner which complies with the

SEC Rules and the rules and regulations of any securities exchange or other relevant authority on which the Debt Securities are for the time being listed. Any notice shall be deemed to have been given in the case of a notice of meeting at the expiration of seven (7) days after the mail containing same is posted and in any other case at the expiration of five (5) days following the date on which the notice was posted or on the date of publication in national newspapers, or if published more than once or on different dates, on the date of the first publication. Where a notice is served personally or sent by courier, it shall be deemed to have been duly given or made at the time of actual receipt. Where a notice is sent by electronic mail transmission it shall deemed to be duly given or made upon receipt of an electronic mail from the recipient, confirming that the said notice has been duly received or upon receipt of an electronic mail confirming that the said electronic mail has been read by the recipient provided that in the case of any electronic mail transmission sent after 4.30 pm, it shall be deemed to have been duly received on the next Business Day.

A meeting of the Holders may be called by giving not less than twenty-eight (28) days’ notice in writing if consent is accorded thereto by Holders holding not less than seventy-five per cent (75%) of the nominal amount of the Debt Securities for the time being outstanding.

(b) Notices from the Holders

Notices to be given by any Holder shall be in writing and given by lodging the same, together with the relevant Certificate (if any), with the Registrar.

CONDITION 14

MEETINGS OF HOLDERS

The Programme Trust Deed contains provisions for convening meetings of Holders to consider any matter affecting their interests, including the sanctioning by a Special Resolution of a modification of any of these General Conditions.

The quorum for any meeting convened to consider a Special Resolution shall be two or more persons holding or representing by proxy in the aggregate not less than 75% of the Nominal Amount of the Debt Securities held by the applicable class for the time being outstanding.

Any Special Resolution duly passed shall be binding on Holders (whether or not they were present at the meeting at which such resolution was passed).

CONDITION 15

ENTITLEMENT AND INDEMNIFICATION OF THE TRUSTEES

In connection with the exercise of its functions (including but not limited to those referred to in this Condition), the Trustees shall have regard to the interests of the Holders as a class and shall not have regard to the consequences of such exercise for individual Holders and the Trustees shall not be entitled to require, nor shall any Holder be entitled to claim, from the Issuer, any indemnification or payment in respect of any tax consequence of any such exercise upon individual Holders.

The Programme Trust Deed contains provisions for the indemnification of the Trustees and for its relief from responsibilities. The Programme Trust Deed also contains provisions pursuant to which the Trustees are entitled, inter alia, (i) to enter into business transactions with the Issuer and to act as trustees for the Holders of any other securities issued or guaranteed by, or relating to, the Issuer, (ii) to exercise and enforce their rights, comply with its obligations and perform its duties under or in relation to any such transactions or, as the case may be, any such trusteeship without regard to the interest of, or consequence for, the Holders and (iii) to retain and not be liable to account for any profit made or any other amount or benefit received thereby or in connection therewith.

CONDITION 16

TRUST PROVISIONS

(a) Declaration of Trust

All moneys or Assets received by the Trustees in respect of the Debt Securities or amounts payable under the Trust Deed shall, despite any appropriation of all or part of them by the Issuer, be held by the Trustees in trust to apply them in accordance with the provisions of the Trust Deed.

(b) Representative of Holders

The Trustees are the representative of the Holders and are authorised to act on behalf of the Holders in accordance with the General Conditions and the Trust Deed and are hereby further authorised to contact the Registrar and/or the CSCS for the purposes of obtaining information: (i) as to the aggregate nominal amount outstanding of any Series of Debt Securities; (ii) relating to the identity of Holders; and (iii) for the purposes of giving notices to Holders under Condition 13 (Notices).

The Holders are deemed to have accepted and will be bound by the General Conditions and the terms of the Trust Deed.

CONDITION 17

MODIFICATION OF THE TRUST DEED

The Trustees may agree with the Issuer, without the consent of the Holders but subject to the prior review and approval of the SEC, to (i) any modification of any of the provisions of the Trust Deed which is in the opinion of the Trustees of a formal, minor or technical nature or is made to correct a manifest error, and (ii) any other modification (except as mentioned in the Trust Deed), and any waiver or authorisation of any breach or proposed breach, of any of the provisions of the Trust Deed which is in the opinion of the Trustees not materially prejudicial to the interests of the Holders. PROVIDED that such consolidation, modification, alteration or addition does not prejudice the interests of the Holders and that such consolidation, modification, alteration or addition does not operate to release the Trustees or the Issuer from any responsibility to the Holders.

No such consolidation, modification, alteration or addition shall impose any further payment on the Holders in respect of the Debt Securities held by them or any liability in respect thereof.

CONDITION 18

FURTHER ISSUES

The Issuer shall be at liberty from time to time without the consent of the Holders to create and issue further Debt Securities, subject to the Programme Limit (the Additional Debt Securities), having terms and conditions which are identical to any of the other Debt Securities already issued under the Programme (the Existing Debt Securities) or the same in all respects save for their respective Issue Prices, Coupon, Issue Dates and aggregate Nominal Amounts, so that the Additional Debt Securities shall be consolidated by the Issuer to form a single Series with the Existing Debt Securities as may be applicable.

CONDITION 19

GOVERNING LAW

The provisions of these General Conditions and the Debt Securities are governed by, and shall be construed in accordance with, the laws of the Federal Republic of Nigeria. The Issuer has agreed for the benefit of the Trustees and the Holders that the courts of Nigeria are to have

exclusive jurisdiction to settle any dispute which may arise out of or in connection with the Trust Deed, the Debt Securities and/or the Coupons or any non-contractual obligation arising out of or in connection with them.

RISK FACTORS

This section does not describe all the risks (including those relating to each prospective investor’s particular circumstances) with respect to an investment in the Bonds. The risks in this section are provided as general information only. Before making any investment decision, prospective investors should refer to, and carefully consider the risks described below and the information contained elsewhere in this Prospectus, which may describe additional risks associated with the Bonds.

The Issuer disclaims any responsibility for advising prospective investors of such risks as they exist at the date of this Prospectus or as such risks may change from time to time. Prospective Investors should consult their own financial and legal advisers about the risks associated with an investment in the Bonds.

An investment in the Bonds involves certain risks, which may or may not occur and neither the Issuer nor any of the Issuing Houses is in a position to express a view on the likelihood of any such contingency occurring. However, if any of the risks described below materialises, the Bank's business, results of operations, financial condition and/or prospects could be materially adversely affected, which could cause the trading price of the Bonds to decline. Therefore, prospective investors should carefully consider, amongst other things, the following risk factors together with all of the other information included in this Prospectus and any applicable Supplement before purchasing the Bonds.

IN RELATION TO NIGERIA

There are risks relating to operating in emerging market countries such as Nigeria

The Bank’s operations are predominantly conducted, and most of its customers are located, in Nigeria. Accordingly, the Bank’s business, results of operations, and/or financial condition, and the ability to recover on its loans and other assets, depend significantly on the economic and political conditions prevailing in Nigeria. In the past, Nigeria has experienced periods of slow or negative real growth, high inflation, Naira devaluation and the imposition of exchange rate controls.

Any deterioration in economic conditions in Nigeria as a result of these or other factors, including a significant depreciation of the Naira or increase in interest rates, could materially adversely affect the Bank’s borrowers and contractual counterparties. This, in turn, could materially adversely affect the Bank’s business, results of operations and/or financial condition, including the Bank’s ability to grow its loan portfolio, the quality of its assets and its ability to implement its business strategy.

Investing in securities of issuers in emerging markets, such as Nigeria, generally involves a higher degree of risk than investments in securities of corporate or sovereign issuers from more developed countries and carries risks that are not typically associated with investing in more mature markets. These risks include, but are not limited to, the following:

 higher volatility and less liquidity in respect of the Bonds;  greater political risk, and changes in, and instability of, the political and economic environment; and  civil strife, acts of war, terrorism, guerrilla activities (including sabotage of oil production) and insurrection Investors should exercise particular care in evaluating the risks involved and must decide for themselves whether, in light of those risks, their investment is appropriate.

There are risks related to political instability, religious differences, ethnicity and regionalism in Nigeria

With the adoption of a Constitution in May 1999, Nigeria has undergone its longest period of civilian rule since obtaining independence from the United Kingdom in 1960. In May 2015, former President, Goodluck Jonathan, left his position upon the election of President Muhammadu Buhari in a general election widely considered the most credible election in the recent history of Nigeria. The handover by former President Goodluck Jonathan without contesting the outcome of the election was believed to have defused a looming political crisis.

In recent years, the country has also experienced recurrent social, ethnic and religious unrest. There have been incidents of ethnically or religiously motivated attacks on people. In recent years nomadic cattle herdsmen have been clashing with agrarian communities over destruction of crops by animals, resulting in hundreds of deaths of residents of these communities. Most recently, reports of armed

Fulani herdsmen attacks in the middle-belt regions of the country have left such communities in disarray.

In 2016, the Nigerian government claimed victory over Boko Haram, an Islamic militant group operating predominantly in North-East Nigeria, which has been categorised as an international terrorist group. The Nigerian government has announced the liberation of cities which were previously under siege by the insurgents and encouraged internally displaced persons (“IDPs”) to return to their communities. While it is suspected that the leader of the Boko Haram terrorist group was killed during the military operations, Boko Haram strongly denies this, and there have been recent, albeit less frequent, incidents of bombings and attacks by the insurgents. In July 2016, a team from the United Nations International Children Emergency Fund was attacked by suspected Boko Haram insurgents, leaving several injured and leading UNICEF to momentarily withdraw aid for IDPs. Despite recent successes in combating insurgent groups, the risk of insurgents regrouping remains and renewed attacks by Boko Haram against the Nigerian army as well as civilians has continued. In February 2018, Boko Haram attacked the Dapchi community in Yobe State, Nigeria and abducted over 100 schoolgirls.

These events have had a direct, minor impact on the Bank. The Bank has suffered loss of properties in the regions affected by conflicts, and has incurred additional expenses to implement extra security measures at its branches in the affected areas, including limiting operating hours in some instances. Unless resolved by the Government, these conflicts may adversely affect Nigeria’s political and economic stability which may, in turn, further affect the Bank’s business, results of operation, and/or financial condition.

Militant activities in the Niger Delta could destabilise oil production in Nigeria, adversely affecting Nigeria’s economy and the Bank’s business

Over the past few years, there has been an increase in violence and civil disturbance in the Niger Delta, Nigeria’s southern oil-producing region, mainly from militant groups who oppose, amongst other things, the activities of the oil companies in the area. This violence has mainly focused on oil interests in the region and oil production from onshore fields slowed as a result of several kidnappings and bombings of oil installations and facilities. Although disturbances have reduced significantly since the Vice President visited the region in February 2017, further disturbances may have a significant impact on Government revenues from oil production, given that most of Nigeria’s oil revenues come from oil produced in the Niger Delta region. At least one international oil company present in Nigeria has raised the possibility that it might cease operations in Nigeria if conditions continue to worsen, while several international oil companies have begun the process of actively divesting their onshore assets in Nigeria, although it is not clear if the divestments were a direct result of the situation in the Niger Delta.

As a result of disturbance described above, oil production in Nigeria has fallen from 2.2 mbd at the beginning of 2016 to reportedly as low as 1.4 mbd at various points throughout 2016. As at 31 December 2017, the average oil production was at 1.9 mbd as the disturbances reduced in 2017. In 2018, there has been relative peace in the region.

In spite of the Government’s efforts, militant acts in the Niger Delta continue to be directed at oil industry participants and against the presence of foreign oil interests in the region and there is no assurance that militant acts will not occur in the future. Although militant acts have subsided, continued unrest in the Niger Delta region may lead to lower oil production, deter foreign direct investment, lead international oil companies to curtail their operations in Nigeria or lead to increased political instability and unrest and could have a material adverse effect on Nigeria’s economy and, as a result, on the Bank’s business, results of operations, and/or financial condition.

IN RELATION TO THE NIGERIAN BANKING SECTOR

The banking sector is affected by changes in the Nigerian economy

The financial results and condition of Nigerian banks and their customers depend to a significant extent on the performance of the Nigerian economy. Any deterioration in economic conditions in Nigeria as a result of factors such as a significant fluctuation in GDP, oil prices, inflation, the value of the Naira or interest rates could materially adversely affect Nigerian banks, including the Bank. The Nigerian economy was in recession in 2016, contracting by 1.6 % overall, reflecting the negative impact of

reduced availability of U.S. dollars in the foreign exchange market, lower oil prices and reduced crude oil production volumes. In 2017, economic contraction continued in the first quarter with real GDP decreasing by 0.9% as the economy remained challenged with U.S. dollar liquidity, although the economy showed signs of recovery in the remaining quarters of 2017, following the intervention of the CBN in the foreign exchange market. Overall, the Nigerian economy grew by 0.8% in 2017. For the first quarter of 2018, GDP growth slowed by 0.16% to 1.95% compared to 2.11% recorded in the fourth quarter of 2017. However, this represents a year on year growth of 2.87% compared to 0.91% GDP contraction in the first quarter of 2017.

The Nigerian economy is highly influenced by oil prices and by the country’s level of oil and gas production. According to the NBS, the oil and gas sector contributed approximately 8.7% to real GDP in 2017. Supply disruptions (theft and sabotage) continued to hamper output in the oil sector and are one of the reasons for the decline in the oil and gas sector’s contribution to GDP. In December 2013, the price of Nigerian crude oil was U.S.$112.8 per barrel. Crude oil prices have fallen significantly in recent years, from U.S.$112.8 per barrel in December 2013 to U.S.$67.1 per barrel in December 2017. The decline in oil prices coupled with disruptions to production has had a negative impact on government revenues, with many states unable to pay salaries. This has affected other sectors such as manufacturing and construction, as well as consumer spending resulting in a decline in GDP growth in 2016 and part of 2017.

Nigeria’s annual inflation rate as measured by the consumer price index (“CPI”) was 16.5%, 15.7% and 9.0% in 2017, 2016 and 2015 respectively. The steady rise in the inflation rate was largely attributable to the decline in the value of Naira, a rise in commodity prices, the global food crisis, and energy and infrastructure constraints.

The exchange rate of the Naira against the U.S. dollar is significantly affected by international oil prices. The sharp decline in international oil prices described above contributed to the depreciation of the Naira against the U.S. dollar over the last three years with the CBN officially devaluing the Naira twice in the period to ₦168 to the U.S. dollar and eventually to ₦197 to the U.S. dollar. In 2017, the CBN official exchange rate remained stable at 306NGN/USD and there was a gradual convergence of other exchange rate windows (Parallel market at 362, NAFEX at 360 and NIFEX at 332). Effective 2017 year end, banks have adopted NIFEX rates for accounting.

Any further significant fluctuations in the Naira against foreign currencies could have a material adverse effect on the financial condition of Nigerian banks. A depreciation in the Naira may result in a decline in asset quality within the banking sector, or a deterioration in banks’ capital position. In addition, banks’ customers may be subject to substantial foreign exchange risk, which indirectly affects such banks’ credit risk profiles. The substantial decline in international oil prices and the exchange rate also had a significant impact on the contracts of importers, most of which were unhedged, particularly in the downstream oil and gas sector and the banks, including the Bank, which had extended credit to them.

Any deterioration in economic conditions in Nigeria as a result of these or other factors, could materially adversely affect the Bank’s borrowers and contractual counterparties. This, in turn, could materially adversely affect the Bank’s business, results of operations and/or financial condition, including the Bank’s ability to grow its loan portfolio, the quality of its assets and its ability to implement its business strategy.

The bank regulatory system in Nigeria is dynamic and may change in a manner that is adverse to the Bank

Nigeria’s banking industry has historically been characterised as highly fragmented, with relatively lower capitalisation and levels of regulation. It is unclear how legal and regulatory developments may affect the competitive banking landscape in Nigeria. In addition, the Nigerian banking sector has experienced rapid credit growth over the past few years, though the appropriate regulatory structure, risk management practices and controls (in line with international regulatory standards) to protect asset quality are still being developed. Although the risk management techniques put in place by the banks have generally curbed or reduced the various risks confronting Nigerian banks, Nigeria has not yet fully implemented Basel III.

The CBN implemented the Guide to Charges by Banks and other Financial Institutions in Nigeria 2017 (the “2017 Guide to Bank Charges”) which took effect on 1 May 2017, providing a standard for the application of charges in the banking industry. Under the 2017 Guide to Bank Charges, Nigerian savings accounts must earn interest at a minimum rate of 30% of the Monetary Policy Rate (the “MPR”) per annum.

From time to time, the Guide to Bank Charges is revised, which may negatively impact the Bank’s revenue streams. For example, the Revised Guide to Bank Charges provided for a systematic gradual phase out of the commission on turnover (the “CoT”) hitherto charged by banks, with CoT being eventually abolished by the 2017 Guide to Bank Charges, resulting in a decrease in the Bank’s net fee and commission income.

The Bank may require CBN approval in respect of certain aspects of its operations, for example to make changes to its branch network or in hiring staff. There can be no assurance that such approval will be given, or that the approval process will not cause delay to the Bank. This may have an adverse effect on the Bank’s business, for example if it is unable to close a branch that is loss making, or if it is not able to hire necessary staff in a timely manner. The CBN may also apply retrospective amendments to rates previously agreed between the Bank and certain of its customers where it deems rates to be too high, and may request the Bank to repay a customer, in some instances with accrued interest.

Also, the implementation of the TSA Policy in 2015 was intended to ensure effective aggregate control over government cash balances.

To support the CBN’s cashless policy in Nigeria and to encourage wider adoption and use of the electronic payments channel in Nigeria, the CBN is also pushing to strengthen the legal framework to protect consumers against fraud, losses and undue charges. The CBN intends to pursue the enactment of several bills by the National Assembly, the legislative branch of the Federal Government (“National Assembly”), to tighten financial sector regulations. The Electronic Transaction Bill would give effect to the admission in evidence of all electronically generated statements of account. The Financial Ombudsman Bill aims to facilitate faster resolution of financial disputes, while the Alternative Dispute Resolution (“ADR”) Regulatory Commission Bill has proposed to create an ADR Commission to promote and regulate the use of ADR in Nigeria.

Under the current administration, the CBN has sought to reduce interest rate and deposit charges and strengthen Nigeria’s foreign currency reserves through capital control measures, which were largely released in June 2016.

No assurance can be given that any future regulatory changes, findings or requests introduced by the CBN will not negatively impact the banking industry or that the regulatory environment in which the Bank operates in Nigeria will not change in the future and in a manner that will not have a material adverse effect on the Bank’s ability to compete and thus on its business, results of operations and/or financial condition. Regulatory standards applicable to banks in Nigeria and the oversight and enforcement thereof by regulators may differ from those applicable to banking operations in countries with highly developed regulatory regimes. As a result, investors may not have the benefit of all of the protections available in such other countries.

The lack of a fully developed central credit bureau in Nigeria may adversely affect the Bank’s retail loan portfolio

As the bulk of its activities and services are conducted in Nigeria, the Bank, like most Nigerian banks, is subject to the credit risk that Nigerian borrowers may not make payments of principal and interest on loans in a timely manner, if at all, and that upon any such failure to pay, the Bank may not be able to enforce any security interest or guarantee that it may have against such borrowers. The credit risk of Nigerian borrowers is relatively high when compared to borrowers from developed markets due to the stage of maturity of the Nigerian market and uncertainties inherent in the political, economic, legal and regulatory environment, as well as the higher risk of fraud. Additionally, the current legal and administrative framework for ownership and transfer of land in Nigeria makes it difficult and expensive for landowners to register land rights and therefore it is difficult for them to pledge their land ownership rights as collateral for a mortgage or other loan. Nigerian banks only enter into land mortgage arrangements for security with the consent of the governor of the relevant state, stamping of the deed of mortgage with the tax authority and registration of the mortgage at the Corporate Affairs Commission

(the “CAC”). These processes require significant costs to be incurred by the mortgagor. In addition, most lands in Nigeria are not captured or registered in the relevant land registry thereby making it difficult for such lands to be used as security for bank loans.

The CBN has established a Credit Risk Management System (“CRMS”), which operates as a public credit registry. The CBN has also licensed some private credit bureaux, including Credit Registry and XDS Credit Bureau, to provide credit information to banks and other entities that are registered with the bureau. The Acting President recently signed into law the Credit Reporting Act 2017 which has given legislative force to the CBN’s efforts. The bureaux are, however, reportedly facing challenges of a dearth of information on individuals and poor data gathering techniques, as well as a lack of a universal unique identifier to facilitate the detection of identity theft. In addition, international rating agencies do not have sufficiently wide coverage of Nigerian borrowers. Furthermore, Nigeria’s system for gathering and publishing statistical information relating to the Nigerian economy generally, or specific economic sectors and companies within it, is not as comprehensive as those of many countries with established market economies. Thus, the statistical, corporate and financial information available to the Bank relating to some of its prospective borrowers, particularly middle tier companies, makes the assessment of credit risk, including the valuation of collateral, more challenging. Although the Bank ordinarily makes provisions for loans and advances in line with the CBN Prudential Guidelines, the absence of additional statistical, corporate and financial information may decrease the accuracy of the Bank’s assessments of credit risk. This may increase the risk of borrower default and decrease the likelihood that the Bank will be able to enforce any security in respect of the corresponding loan or that the relevant collateral will have a value commensurate to the loan secured on it. This could, in turn, have a material adverse effect on the Bank’s business, results of operations and/or financial condition.

IN RELATION TO THE ISSUER

The Issuer’s business is highly dependent on the Nigerian economy, which is largely dependent on oil revenue

The Bank’s financial results and condition depend to a significant extent on the performance of the Nigerian economy. The Nigerian economy is highly influenced by the health of the oil and gas sector, including oil prices and the country’s level of oil and gas production. According to the Nigerian Bureau of Statistics, the oil sector contributed 8.7%, 8.4% and 9.6% to Nigeria’s real GDP in 2017, 2016 and 2015, respectively.

NBS figures show that while the country’s real GDP grew at an average of approximately 6.0% between 2005 and 2015, real GDP growth was 6.2% in 2014, slowed to 2.8% in 2015 and then contracted by 1.6% in 2016. Recovery began in 2017, with real GDP growth of 0.8% for the year, and a growth of 1.9% in the fourth quarter of 2017. In 2018, Nigeria’s real GDP is expected to grow by at least 2.5%, according to the World Bank.

The global decline in oil prices that began in 2014 adversely impacted the Nigerian economy. The price of Nigerian crude oil peaked at U.S.$114.6 per barrel in June 2014, then fell significantly to U.S.$63.3 in December 2014 and to U.S.$37.8 in December 2015. It rose to U.S.$53.5 in December 2016 and U.S.$62.5 in December 2017, according to the CBN. As at 31 March 2018, Nigerian crude oil price was U.S.$70.27 per barrel. The overall decline in oil prices was largely a result of global supply and demand imbalance, as well as disruptions to oil production and a slowdown in global economic growth.

Reductions in oil production and continued oil supply disruptions could have a material adverse effect on the Nigerian economy and the Bank’s business. Oil production in Nigeria has fluctuated in recent years, primarily as a result of militant attacks in the Niger Delta region. Nigeria’s level of oil production may also be adversely affected by other factors, including changes in oil production quotas by the Organisation of Petroleum Exporting Countries (OPEC) or the response of international oil companies to changes in the regulatory framework for oil production in Nigeria. There may also be loss of revenue arising from the interruption of production operations and theft of crude oil from pipelines and tank farms. Further, there may be a high incidence of abandoned projects by oil companies in communities where activities are disrupted by militants, which may lead to slower growth in oil and gas production. Many developed economies are actively seeking to develop alternative sources of energy and reduce their dependence on oil as a source of energy. Any long-term shift away from fossil fuels could adversely affect oil demand and negatively affect oil production and prices in Nigeria.

As with all Nigerian banks, a significant portion of the Bank’s growth and operating profit arises from customers in the oil sector or sectors linked to the performance of the oil and gas sector. Although Nigeria’s economy has since shown signs of recovery, the Nigerian economic slowdown in 2015 and 2016 due to the drop in oil prices and decrease in and disruption to oil production led to a significant spike in non-performing loans in the Nigerian banking sector as a whole.

The Bank's loan portfolio is concentrated, including in the oil and gas, power and energy and manufacturing sectors. As such, any weakened performance in these sectors could result in increased liquidity risk, declines in the Bank's credit quality, an increase in non-performing loans and other material adverse effects on the Bank's business, results of operation, financial condition and/or prospects.

As at 31 December 2017, 40.6% of the Bank’s total loan portfolio was represented by loans to the oil and gas sector. The Bank’s non-performing loans in the oil and gas sector decreased from ₦10,201 million as at 31 December 2015 to ₦346.6 million as at 31 December 2016 and increased to ₦ 23,219 million as at 31 December 2017. Some of the measures adopted by Nigerian banks to ensure their oil and gas exposures continue to perform included restructuring their loans in the oil and gas sector by increasing the loan maturity and converting amortising loans into bullet repayment, amongst other types of restructuring. Many other sectors of the Nigerian economy, including manufacturing, construction and retail sectors, which account for a proportion of the Bank’s business, have been adversely affected by the decrease in oil prices and declining production. The Bank's retail and commercial business may also be adversely impacted should the Bank's customers be unable to make payments on existing loans provided by the Bank, maintain their deposit accounts or experience a significantly decreased appetite for new loan products and services due to a decrease in consumer confidence and spending, late salary payments (including by state government employers) or job loss caused by the factors described above. Any such significant declines in retail deposits could increase the Bank's liquidity risk, lower its credit quality and have a material adverse effect on the Bank's business, results of operation, financial condition and/or prospects. Any of the above factors could have a material adverse effect on the Bank’s business, results of operation, and/or financial condition.

The Issuer is subject to foreign exchange risk and may be adversely affected by the fluctuation of the Naira against other currencies

The Bank is exposed to foreign exchange risk as a result of adverse movements in exchange rates, primarily through its loan and deposit portfolios that are denominated in foreign currencies, its existing borrowings and through acting as an intermediary in foreign exchange transactions between central bank, commercial banks and retail end users. As a result, adverse changes in currency exchange rates could have a material adverse effect on the Bank’s business, results of operations and/or financial condition.

The Bank’s presentation currency and its functional currency is the Naira. As at 31 December 2017, 38% of the Bank’s financial assets and 43% of the Bank’s financial liabilities, respectively, were denominated in foreign currencies, principally the U.S. dollar. The Bank is therefore subject to translation risk. Monetary assets and liabilities originally denominated in foreign currencies are translated into Naira at the relevant balance sheet date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Bank’s consolidated income statement. Having a net foreign currency balance sheet position tends to result in foreign exchange translation gains when the Naira depreciates against such foreign currencies and in foreign exchange translation losses when the Naira appreciates against such foreign currencies in nominal terms. Gains and losses arising from such translations are reflected in the Bank’s consolidated income statement as foreign exchange revaluation gain under other operating income. As a result, the Bank’s reported income is affected by changes in the value of the Naira with respect to foreign currencies (primarily the U.S. dollar). Currency movements may also affect the Bank’s balance sheet position. As at 31 December 2017, the gap between the Bank’s foreign currency assets and liabilities was ₦ 28,410 million for U.S. dollars. Although the Bank has taken certain measures to hedge against the mismatches in the foreign currency structure of its assets and liabilities, these measures may not adequately protect the Bank from the effect of exchange rate fluctuations or may limit any benefit that the Bank might otherwise receive from favourable movements in exchange rates. The Bank manages its exchange rate risk by matching U.S. dollar liabilities with its U.S. dollar assets, in line with the Bank’s board-approved currency management policy.

In June 2016 the CBN reintroduced market-driven currency trading under a flexible exchange rate system whereby the CBN will only intervene through direct participation in the inter-bank foreign exchange market or through large scale secondary market sales to authorised dealers. On the day of the CBN’s announcement, the Naira fell approximately 30% in value to ₦280 to the U.S. dollar and as at 31 December 2016 was valued at ₦304 to the U.S. dollar, although it was trading up to ₦450 to the U.S. dollar in the unofficial parallel markets.

The Bank may experience a decline in asset quality following any Naira depreciation, as well as deterioration in its capital position due to inflation of risk-weighted assets caused by appreciation in foreign currency denominated assets. As such, any further significant fluctuations in the Naira against such foreign currencies could have a material adverse effect on the Bank’s business, results of operations, and/or financial condition.

In addition, the Bank’s customers may be subject to substantial foreign exchange risk, which indirectly affects the Bank’s credit risk profile. As at 31 December 2017 and 31 December 2016, 51.1% and 47.7%, respectively, of the Bank’s gross loans and advances were denominated in U.S. dollars excluding other currencies. The Naira devaluation has made borrowings more expensive for customers of some Nigerian banks whose revenues are denominated primarily in Naira, but whose borrowings are in a foreign currency such as U.S. dollars. As a result of the Naira devaluation, many customers of Nigerian banks have sought to restructure their foreign loans into the local currency. While, as at the date of this Prospectus, many of the Bank’s borrowers of foreign currency denominated loans have significant foreign currency denominated cash flows, any significant decline in the value of the Naira may result in borrowers being unable to repay foreign currency denominated loans, which may have a material adverse effect on the Bank’s business, results of operations and/or financial condition.

The Issuer’s investment portfolio is concentrated in Government bonds and treasury bills, and as yields on such securities are declining, the Bank’s interest income is expected to decline as well

For the full year ended 31 December 2017, 20.3% of the Bank’s interest income was comprised of income earned on Federal Government bonds (the “FGN Bonds”), and treasury bills (together with the FGN Bonds, the “Government Instruments”), compared to 18.8%, and 23.3% for the years ended 31 December 2016 and 2015, respectively. In the first quarter of 2018, yields on Government Instruments have been declining and are expected to continue to decline as the Government aims to reduce domestic debt issues.

If yields on Government instruments decline, the Bank’s interest income and ultimately net margins could be impacted, at least during the short-term. In the long-term, the Bank will look for higher earning assets to reinvest its liquidity (including in its loan book), and the lower interest rate environment is expected to lower the Bank’s cost of funds (particularly on deposit). However, given the Bank’s high concentration of investments in Government instruments, it will continue to feel the impact of changes in yields.

In the event that the Nigerian Government defaults on its obligations or suffers a ratings downgrade, the value of Government Instruments declines or if there is some other interruption in the market for Government Instruments, the Bank will need to seek other alternatives to maintain margins, which may subject it to greater credit risk and challenges around the required capital. The Bank’s business, results of operations and/or financial condition could be materially and adversely affected.

The Bank’s loan portfolio and deposit base are concentrated

The Bank’s loan portfolio is concentrated in the oil and gas, power and energy and manufacturing sectors, which represented 43%, 10%, and 10%, respectively, of the Bank’s gross loans as at 31 December 2017.

Additionally, the Bank’s loan portfolio is concentrated with some of its largest customers. As at 31 December 2017, 31 December 2016 and 31 December 2015, the Bank’s 20 largest borrowers comprised, 60%, 57% and 53% of its gross loan portfolio, respectively. Whilst this in part reflects the limited number of high quality corporate credits in Nigeria, the Bank will require continued emphasis on credit quality and the continued development of credit management and credit control systems to monitor this credit exposure.

As at 31 December 2017, 31 December 2016 and 31 December 2015, the Bank’s 20 largest depositors (by total deposits received) accounted for 26%, 18% and 17% of total deposits, respectively. As at 31 December 2017, 14% of the Bank’s total deposits were denominated in foreign currencies (primarily U.S. dollars). The Bank continues to reduce the concentration in its deposit base by attracting further deposits from retail depositors and by gathering deposits through value chain banking. Failure to reduce such concentration could, however, expose the Bank to increased liquidity risk and have a material adverse effect on the Bank’s business, results of operations, and/or financial condition.

The Bank relies on short term deposits as its primary source of funding, which may result in liquidity gaps and/or increased costs of funding

The Bank is exposed to liquidity risk due to maturity mismatches between its assets and liabilities. In common with other banks in Nigeria, the Bank has historically relied almost exclusively on corporate and retail depositors to meet its funding needs as access to other funding sources, including the capital markets, has been limited. As at 31 December 2017, 31 December 2016 and 31 December 2015, the Bank’s deposits accounted for 81%, 79% and 83% of total funding excluding equity, respectively. The Bank is currently trying to diversify its funding sources by the issuance of capital markets instruments, including the Bonds. However, the ability of the Bank to attract such funds could be affected by a number of factors, including Nigerian economic and political conditions, the state of the Nigerian capital markets and general international economic and capital markets conditions and the cost of such funding could exceed the cost of customer deposits.

As at 31 December 2017, 49.9% of the Bank’s financial liabilities (comprising deposits from customers, other borrowed funds and other liabilities) were due within three months and 55% of the Bank’s non-financial assets (comprising cash and balances with central banks, due from banks, loans and advances to customers, investment securities and other assets) had maturities of less than three months. The Bank could face difficulties in meeting its liabilities as they fall due if it does not have sufficient liquid assets to meet these maturities or withdrawals, or if it fails to attract additional medium- to long-term financing, or if the Bank were to suffer a sudden increase in withdrawal of deposits, which currently form a significant portion of the Bank’s funding. Failure to diversify its funding source could expose the Bank to increased liquidity risk and could have a material adverse effect on the Bank’s business, results of operations and/or financial condition.

While Nigeria is currently in a declining interest rate environment, no assurance can be given that the Bank will be able to maintain its existing level of deposits without increasing its cost of funding, particularly as the Nigerian banking sector becomes more competitive. If a substantial portion of the Bank’s depositors withdraw their demand deposits or do not roll over their time deposits upon maturity, the Bank may need to seek more expensive sources of funding to meet its funding requirements. As a result, no assurance can be made that the Bank will be able to obtain additional funding on commercially reasonable terms as and when required.

The Bank believes that its liquidity risk management policy, which includes maintaining and monitoring its cash and liquid securities portfolio to try to ensure that they are sufficient to meet current demands, coupled with its ability to call and/or reprice most of its loans on an annual basis, allow and will continue to allow it to meet its liquidity needs. However, a deterioration of the Nigerian economy, an inability to access alternative sources of funds in the international capital, syndicated loan and interbank markets, significant withdrawals of corporate and retail deposits and/or continued mismatches between the Bank’s assets and liabilities may, together or separately, have a material adverse effect on the Bank’s business, results of operations and/or financial condition.

The Bank may not be able to grow its loan book, and may have difficulty in maintaining credit quality, which could negatively affect its profitability

The Bank’s gross loans and advances to customers was ₦517,103 million as at 31 December 2017, ₦535,836 million as at 31 December 2016 and ₦388,794 million as at 31 December 2015. The marginal increase in gross loans and advances to customers from 2016 to 2017 was largely a result of improved foreign currency availability, which enabled the Bank’s customers to repay foreign currency denominated loans. The steep increase in loans and advances to customers from 2015 to 2016 was

largely a result of the Naira devaluation, with 25% of the Bank’s gross loan growth attributable to the Naira devaluation, while organic loan growth was a more modest 13%.

The current macroeconomic climate in Nigeria over the last several years has made it difficult for Nigerian banks to find high quality borrowers that meet acceptable credit requirements in order to increase organic loan growth. If yields on Government instruments decline, the Bank would be under pressure to increase lending in order to offset declining net interest margins. However, there can be no assurances that the Bank will be able to increase its loan book, or, if it does increase, that it will be able to maintain a high level of credit quality in such loan book.

An increase in the overall level of lending could increase the credit risk of the Bank. In particular, retail and small commercial banking customers typically have less financial strength than large companies; negative developments in the Nigerian economy could affect these borrowers more significantly than large companies.

Failure by the Bank to grow its loan book or any such significant increase in loan defaults could reduce the Bank’s profitability, increase the Bank’s liquidity and funding risk, lower its credit quality and have a material adverse effect on the Bank’s business, results of operation, and/or financial condition.

High levels of non-performing loans may negatively impact the Bank’s results and financial condition

The Bank’s non-performing loans (“NPLs”) as at 31 December 2017 stood at ₦110,911 million, representing 19.8% of gross loans and advances, compared to ₦37,025 million, or 7.1% of total gross loans and advances as at 31 December 2016 and ₦25,937 million, or 6.9%, of total gross loans and advances as at 31 December 2015. The overall increase in NPLs between 2015 and 2017 was mainly due to devaluation of the Naira and the economic recession in Nigeria during the period. Although the Bank continues to actively manage and monitor its loan portfolio, there can be no assurance that, in the future, the Bank will be able to maintain a level of NPLs at or below the NPL ratio recorded at 31 December 2017. However, as at 31 March 2018, the Bank’s NPL ratio had dropped to 14.8%. Factors which may contribute to an increase in the amount of the Bank’s NPLs include an increased loan portfolio, relative concentration of the loan portfolio and the reduced ability of existing customers to pay their foreign exchange denominated debt, or generally any slowdown in the Nigerian economy, any further decreases in oil prices and any further impacts of the Naira free float. Any further deterioration in the Bank’s loan portfolio could result in increased liquidity risk, an increase in non-performing loans and other material adverse effects on the Bank’s business, results of operations, and/or financial condition.

Further, the Bank is subject to IFRS 9 as of 1 January 2018, the application of which has an impact on the assumptions and estimates used by the Bank in preparing subsequent financial statements. While IFRS 9 itself does not result in any deterioration of the loan book, it may result in an increase in provisioning and in particular may result in higher NPL ratios.

Any significant increase in credit exposure will require continued or enhanced emphasis by the Bank on credit quality, the adequacy of its impairment provisioning levels and the continued development of financial and management control. Due to the size of each loan to the Bank’s corporate customers, a single default by a corporate borrower could significantly impact the Bank’s loan impairment. Failure to successfully manage growth and development and to maintain the quality of the Bank’s assets could have a material adverse effect on the Bank’s business, results of operations and/or financial condition.

A decline in the value or the liquidity of the collateral securing the Bank’s loans, and difficulty in obtaining and enforcing adequate security as collateral for the Bank’s loans may adversely affect its loan portfolio

Whilst there are limitations on securing effective collateral over certain assets, including land, a substantial portion of the Bank’s loans to corporate customers and individuals is secured by collateral such as real property, land leasing rights, production equipment, vehicles and securities. Downturns in the relevant markets, a lack of an existing market for the collateral within Nigeria or a general deterioration of economic conditions may result in declines in the value of collateral securing a number of loans to levels below the amounts of the outstanding principal and accrued interest on those loans. If collateral values decline, they may not be sufficient to cover non-recoverable amounts on the Bank’s

secured loans (including any NPLs), which may require the Bank to classify the relevant loans, establish additional loan impairment and increase reserve requirements. A failure to recover the expected value of collateral may expose the Bank to losses, which may materially adversely affect the Bank’s business, results of operations and/or financial condition.

As at 31 December 2017, 91.54% of the Bank’s loans and advances to customers were secured. If the Bank enforces the security, for various reasons the realisable value from the respective security may be less than the corresponding outstanding loan. Some secured loans have lower recovery rates on the collateral following a default in the loan, due to the types of collateral involved – generally consumer products, such as appliances and cars, which are difficult to recover. Certain types of security such as mortgages are also difficult to perfect due to government bureaucracy, perfection costs and incomplete documentation. While in recent years the CBN has implemented a number of measures to improve registration and recording of collateral, it is too early to assess the long-term effects that these measures will have on the financial landscape in Nigeria. In addition, the Nigerian judicial system is still developing, which often result in delays in the judicial process. Accordingly, there is a possibility that the Bank’s loan portfolio may be affected by challenges in realising security for loans due to delays in the judicial process.

Failure to obtain security with sufficient value, to adequately perfect security interests or to recover collateral held for loans could have a material adverse effect on the Bank’s business, results of operations and/or financial condition.

The Bank’s net interest margin could experience pressure due to Government monetary policies and the Nigerian banking sector environment

The banking industry in Nigeria has become increasingly competitive, which has resulted in increasing pressure on interest rates charged by the Bank on loans and deposits, particularly in the corporate segment, as the Bank competes for business. The Bank’s net interest margin (defined as net interest income divided by monthly average interest-earning assets) was 8.6% for the year ended 31 December 2017, compared to 8.6% for the year ended 31 December 2016, and 8.5% for the year ended 31 December 2015, respectively. There can be no assurance that the Bank will be able to maintain net interest margins at similar rates in the future.

Since mid-2016, yields on Government securities, such as treasury bills and FGN Bonds, have increased. This has allowed the Bank and other Nigerian banks to improve net interest margins as they have allocated more funding into these higher yielding assets, and limited organic growth. However, following the gradual economic recovery which started in the second half of 2017, rates on treasury bills have begun to decline, as the Government’s effort to refinance expensive local debt with cheaper foreign funds. Consequently, the Bank’s net interest margin may decline in the future.

In the future, these factors could materially and adversely affect the Nigerian banking industry as a whole and have a material adverse effect on the Bank’s business, results of operations and/or financial condition.

The Bank operates in a dynamic regulatory environment and recent and future changes may have a material adverse effect on the Bank

The Group operates in a dynamic regulatory environment and recent changes to and by the CBN may have a material adverse effect on the Group.

By way of example, in order to ensure centralised, transparent and accountable revenue management within various ministries and agencies of the Government, the treasury single account policy (the “TSA Policy”) was implemented in 2015. The TSA Policy provides that all bank accounts of the Federal Government and its parastatals/agencies are held centrally with the CBN, rather than in commercial banks as was the case previously, to ensure effective aggregate control over government cash balances. Across the banking sector, the TSA Policy resulted in a decrease in deposits from public sector and financial institutions, effectively reducing liquidity across the sector.

Another example includes the way cash reserves (which need to be maintained in non-interest earning accounts) are managed. Prior to May 2015, the CBN’s Cash Reserve Requirement (the “CRR”) for deposits was 20% for private sector deposits and 75% for public sector deposits. In May 2015, the CRR

was harmonised by the CBN at 31% and thereafter decreased to 22.5% in March 2016, and has been retained at that level since then. However, the banking sector’s effective CRR is higher based on movements in deposit base, ultimately impacting liquidity and interest rates. An upward review of the CRR by the CBN could materially affect the Group’s profitability through its adverse effect on liquidity and cost of funds. If the CRR for deposits were to be increased again or if any other changes were made to reduce liquidity in the Nigerian banking sector generally as well as decreases in the Group’s deposits, it could adversely affect the Group.

These factors and regulatory changes have created (and any future regulatory changes or tax reform introduced by the CBN or the Government may create) a dynamic regulatory environment, which could materially and adversely affect the Nigerian banking industry as a whole and have a material adverse effect on the Group’s business, results of operations and/or financial condition.

The Government and the CBN are increasingly focused on improving financial inclusion in Nigeria, which may result in certain obligations being placed on the Bank that are unprofitable

The Government has set a target to achieve a national financial inclusion rate of 80% by 2020. In order to achieve this target, the CBN has imposed and is expected to continue to impose a number of requirements on the banking sector. For example, the Bank may not be able to shut down unprofitable branches in certain regions of the country to ensure that they continue to service underserved communities.

The Bank may be sanctioned for non-compliance with regulations applicable to banks in Nigeria, including by regulators other than the CBN

The Bank is subject to the risk of being sanctioned by the CBN for non-compliance with applicable regulations. The powers of the CBN under the laws and regulations are extensive and include the power to take over the management of banks. The Bank is not currently facing any actual or threatened penalties by the CBN or other regulators. However, regulators regularly review the business conduct and policies of the Bank and the Bank may be subject to sanctions for any non-compliance.

The Bank is also subject to the regulatory purview of certain regulators such as the Financial Reporting Council of Nigeria (“FRCN”). There can be no assurance that the Bank will not at some point be subject to investigation and disciplinary action by the regulators, including in relation to any of the above, and such actions could have a material adverse effect on the Bank’s business, results of operations and/or financial condition.

The Bank may face difficulties meeting capital adequacy requirements

There can be no assurance that the CBN will not further amend or raise the capital requirements applicable to the Bank and if the Bank requires additional capital in the future, there can be no assurance that it will be able to obtain this capital on favourable terms, in a timely manner or at all. The Bank’s capital adequacy could decline as a result of various factors, such as a decline in the quality of the Bank’s credit portfolio or exchange rate movements, or additional loan loss impairment arising from the ongoing risk assets examination by the CBN.

Following the raising of ₦49.7 billion via the Bank’s rights issue towards the end of 2017, the Bank’s capital adequacy ratio increased from 13.3% as at 31 December 2016 to 17.8% as at 31 December 2017, compared to the minimum regulatory requirement of 15%. If the Bank fails to meet its capital adequacy requirements, the CBN may take certain actions, including restricting its capital expenditure and/or risk asset growth, suspending all but its low risk activities and imposing restrictions on the payment of dividends.

Furthermore, if the Basel III guidelines are implemented in Nigeria in their current form, they could significantly increase the minimum quantity and quality of capital that the Bank is obliged to maintain. Increased capital costs may adversely affect the Bank’s ability to implement its strategic plans and may ultimately have a material adverse effect on the Bank’s business, results of operations and/or financial condition.

Changes in the Bank’s accounting policies or in accounting standards could materially affect its capital ratios, how it reports its financial condition and results of operations

From time to time, the International Accounting Standards Board (“IASB”) changes the international financial reporting standards issued by the IASB (“IFRS”) that govern the preparation of financial statements globally, including the Bank’s financial statements. These changes could materially impact how banks, including the Bank, record and report their financial condition and results of operations.

IFRS 9 “Financial Instruments” is the new standard that replaces IAS 39 “Financial Instruments: Recognition and Measurement”. It has changed the classification and measurement of some financial assets, the recognition and the financial impact of impairment and hedge accounting. IFRS 9 is required to be implemented in the Bank’s financial statements for the financial year ending 31 December 2018. Amongst other changes, IFRS 9 replaces the incurred loss approach to impairment of IAS 39 with one based on expected credit losses (“ECL”), which results in earlier recognition of credit losses. This introduces a number of new concepts and changes to the approach to provisioning, compared with the methodology under IAS 39.

There is a risk that application of IFRS 9 may lead to a sudden significant increase in ECL provisions and consequently a sudden decrease in the capital ratios of institutions, including the Bank. The Bank’s current estimates are that IFRS 9 will lead to an increase in provisions held against loans and advances to customers, in so far as it:

 estimates credit losses on certain assets over their full life on an expected credit loss basis, rather than the current incurred loss basis; and

 takes account of forward-looking economic scenarios and captures potential downside economic risks that are not explicitly included in the current methodology.

While the implementation of IFRS 9 is not expected to change the Bank’s loan book itself, the impact of ECL on the Bank’s financial statements, as well as its effect on capital requirements, is subject to further review and assessment. As of 31 December 2017, the Bank’s regulatory risk reserve and its credit loss allowance, determined in accordance with IAS 39, are sufficient to meet ECL requirements. However, the IASB may in the future make other changes that govern the preparation of financial statements, including the financial statements of the Bank. Any such further change could materially affect its reported financial condition and results of operations. Any failure by the Bank to satisfy such requirements within the applicable timeline could result in administrative actions or sanctions or reputational harm which in turn may have a material adverse effect on the Bank’s business, results of operations and/or financial condition.

The competitive environment in the Nigerian banking industry may negatively affect the Bank’s business, results of operations and/or financial condition

The Nigerian market for banking and financial services is highly competitive and the Bank faces competition from different banks in each of the segments and regions where it operates. Although historically the Bank has achieved consistent and sustainable growth, it may be unable to maintain or improve historical growth and profitability levels due to the weakness in its operating environment.

Some of the Bank’s competitors in Nigeria, in particular with respect to corporate lending activities, are much larger or are international banks which have the support of foreign parents and have greater capital resources available to them. The Bank expects the Nigerian corporate and commercial banking market to become even more competitive, which is likely to result in a further narrowing of spreads between deposit and loan rates and have an adverse impact on the Bank’s profitability. Additionally, loans to any single borrower are limited by the CBN to 20.0% of shareholders’ funds, thus making it potentially more difficult for the Bank to make future loans compared to banks with larger capital bases. In addition, commercial banks like the Bank are now restricted to only those equity investments permitted under the Bank and other Financial Institutions Act CAP B3 LFN 2004 (the “BOFIA”) and the CBN Regulations.

There has also been increasing competition from non-banks in recent years, in particular companies in the telecommunication industry (“Telcos”). In recent years, there has been persistent discussion about whether to have a bank-led or Telco-led mobile money market in Nigeria. The success of M-Pesa (owned by the Telco, Safaricom) in Kenya has often been the benchmark used by financial experts in advocating for Telcos to be licensed as financial services providers. Currently, Nigeria’s mobile money market is bank-led, and therefore, only lenders are licensed to operate in the space. However, mobile operators have already expressed interest in acquiring mobile money licences in Nigeria. The incursion

of Telcos in the banking space is an imminent threat for existing players in the industry, including the Bank, although it is envisaged that Telcos may require banking licenses to become financial services providers.

The Bank’s growth depends on its ability to gain market share, extend its distribution network, manage its cost base, access low cost deposits and grow quality risk assets, in order to allow it to maintain strong levels of profitability and returns despite being required to hold higher levels of capital by the CBN.

The Bank may not be successful in introducing new products and service

In order to maintain its competitive advantage, the Bank has expanded and intends to continue to expand the range of its banking products (e.g. mobile banking, franchised products or additional electronic banking (“e-banking”) products) and services (e.g. into new geographies or new market segments). This exposes the Bank to a number of risks and challenges, including the following:

 the introduction of new products and services may require capital expenditure and there is no guarantee that these new products and services will meet expectations for profitability;

 the Bank may need to hire or retain personnel who are able to conduct new business activities;

 the Bank must continually add to the capability of its risk management and information technology systems to support a broader range of activities; and

 the Bank may have limited experience in certain new business activities and may not be able to successfully implement those.

If the Bank is not able to achieve the intended results in these new business areas or products, its business, results of operations and financial condition may be materially adversely affected. In addition, if the Bank fails to promptly identify and expand into new areas of business to meet the increasing demand for certain products and services, the Bank may fail to maintain its market share or lose some of its existing customers to competitors.

The Bank is subject to risks relating to its information technology systems and its ability to remain competitive depends partly on its ability to upgrade such systems

The Bank depends on its information technology systems to process a large number of transactions on an accurate and timely basis, and to store and process significant volumes of operating data. The proper functioning of the Bank’s financial control, risk management, credit analysis and reporting, accounting, customer service and other information technology systems (such as its electronic fraud monitoring and surveillance systems and customer insurance programmes), as well as the communication networks between its branches and main data processing centres, are critical to the Bank’s business and ability to compete effectively. Unlike banks in many other countries, the Bank is unable to rely on state or utility providers of power and telecommunication services for the quality and quantity of services it requires for its operations, and has to make its own arrangements to secure these services. The Bank’s business activities would be materially disrupted if there were to be a partial or complete failure of any of the Bank’s material information technology systems or communications networks. Such failures can be caused by a variety of factors, including natural disasters, extended power outages, computer viruses, and/or complications related to the limited national fibre optic coverage in Nigeria. The proper functioning of the Bank’s information technology systems also depends on accurate and reliable data and other system inputs, which are subject to human errors. Any failure or delay in recording or processing the Bank’s transaction data could subject it to claims for losses and regulatory fines and penalties, which could have a material adverse effect on the Bank’s business, results of operations and/or financial condition.

The Bank’s ability to remain competitive will, to a certain extent, depend on its ability to upgrade its information technology systems on a timely and cost-effective basis. In addition, the information available to and received by the Bank through its existing information technology systems may not be timely or sufficient for the Bank to manage risks and plan for, and respond to, market changes and other developments in the current operating environment. As additional information technology platforms are introduced and become integral to the Bank’s product offering, unforeseen technical difficulties may

cause disruption in the Bank’s operations. There can be no assurance that the Bank will implement these projects effectively or execute them efficiently, which could lead to increased project costs, delays in the Bank’s ability to comply with regulatory requirements, failure of the Bank’s information security controls or a decrease in the Bank’s ability to service its customers. Any substantial failure to improve or upgrade the Bank’s information technology systems effectively or on a timely basis, or failure to implement more efficient process automation, could materially and adversely affect the Bank’s business, results of operations and/or financial condition.

The Bank may experience security and privacy breaches of the systems it uses to protect personal data and such systems may also be affected by physical events

Information security risks for large financial institutions have increased in recent years, in part because of the proliferation of new technologies, the use of internet and telecommunications technology and the increased sophistication and activities of organised criminals and hackers. In addition, to access the Bank’s products and services, customers may use personal smartphones, personal computers and other computing devices, personal tablet computers and other mobile devices that are beyond the Bank’s control systems.

The Bank’s databases contain certain personal data of its customers; these databases may be vulnerable to damage, including telecommunications and network failures, natural disasters and human acts both by individuals external to the Bank’s business as well as the Bank’s employees. The Bank’s primary data centre and its head office are located in Lagos. Any natural disaster, power outage or other event affecting the Lagos region may cause disruptions or damages to the data centre, which may adversely affect the Bank’s operations.

Whilst the Bank has not experienced any material disruptions or security breaches in the past, any material security breach or other disruptions could expose the Bank to risk of loss and regulatory actions and harm its reputation. Although the Bank is ISO 27001 certified with respect to information security, its computer systems, software and networks may be vulnerable to unauthorised access, misuse, denial-of-service attacks, phishing attacks (SMS phishing by which individuals or organised groups send SMS or text messages to the Bank’s customers to obtain sensitive information or account credentials), computer viruses or other malicious code. The Bank and its customers have been and continue to be subject to a range of cyber-attacks and the Bank has experienced an increase in fraudulent SMS attacks on its customers. As attempted attacks continue to evolve in scope and sophistication, the Bank may incur additional costs in its attempts to modify or enhance its protective measures against such attacks, or to investigate or remediate any vulnerability or resulting breach.

Information security threats may also occur as a result of the Bank’s size and role in the financial services industry, its plans to continue to implement internet banking and mobile banking channel strategies and develop additional remote connectivity solutions. As financial technology continues to develop, the Bank (or its third-party suppliers) may be exposed to new risks to its business and the security of its data, including risks it may not be able to anticipate, as well as increased operating costs from ensuring that any new products and services it provides are implemented correctly and operated safely and securely.

If the Bank fails to effectively manage its IT, cybersecurity and privacy risks, it may become exposed to liability, including regulatory fines or penalties, become subject to increased expenses relating to the resolution of any security or privacy breaches of the Bank’s databases and the mitigation of the impact of such breaches on affected individuals, and the Bank’s reputation could be harmed. Any of the above could have a material adverse effect on the Bank’s business, results of operations and/or financial condition.

The Bank may have difficulty recruiting and retaining well qualified personnel

The Bank is dependent on members of its Board of Directors and other key members of the management teams for the development and implementation of its strategy. Should members of the management team leave the Bank, the operational efficiency of the management team may be compromised, which in turn may have an adverse effect on the Bank’s efficiency.

The Bank’s success will depend, in part, on its ability to attract, motivate and retain qualified and experienced banking and management personnel. Competition in the Nigerian banking industry for personnel is considerable. Whilst the Bank believes that it has effective staff recruitment, training and

incentive programmes in place, there can be no assurance that these will be sufficient to allow the Bank to recruit, train and retain an adequate number of qualified personnel to run its business and to execute its strategy. Any failure by the Bank to recruit, train and/or retain qualified necessary personnel could have a material adverse effect on its business, results of operations and/or financial condition.

If the Bank fails to maintain licences required to conduct its operations, or if any existing licences are revoked, its operations may be adversely affected

Banking and other operations performed by banks in Nigeria require licences from the CBN. The CBN has granted the Bank an international commercial banking licence which permits it to own and operate subsidiaries outside Nigeria. The Bank has also obtained all other licences required in connection with its current banking operations, including banking operations involving foreign currencies. However, there can be no assurance that the Bank will be able to obtain required licences or maintain existing licences in the future. In the event that the Bank loses a CBN licence or is required to apply for a new licence, the process could be burdensome and time-consuming. Pursuant to the Regulation on Banking Activities and Ancillary Matters No. 3 of 2010 issued by the CBN (the “CBN Regulations”), which repealed the Universal Banking Guidelines, every Nigerian bank that held a universal banking licence was required to apply to the CBN to have its universal banking licence exchanged for an appropriate licence to conduct banking business as one of the permitted types of banks in Nigeria (commercial, merchant or specialised). As a result of this regulation, the Bank profitably divested of its non-banking subsidiaries between 2014 and 2015, aligned with its strategy to focus on core banking. The CBN may, as part of its supervisory duties, impose additional requirements or deny any request by the Bank for licences. Similar actions by the CBN could limit the Bank’s operations or materially adversely affect its business, results of operations and/or financial condition. In particular, the loss of its commercial banking licence, a breach of the terms of a general banking licence by the Bank or a failure to obtain such a licence in the future could result in the Bank being unable to continue some or all of its banking activities, being unable to expand its business internationally and being subject to penalties and fines by the CBN. Any such failure could, in turn, have a material adverse effect on the Bank’s business, results of operations and/or financial condition.

Failure by the Bank’s employees to adhere to the Bank’s risk management and internal control policies and procedures may leave it exposed to unidentified or unanticipated risks

The Bank has devoted resources to developing its risk management policies and procedures, particularly in connection with credit, market, liquidity, interest rate and operational risks, and the Bank expects to continue to do so in the future in accordance with the Bank’s Enterprise Risk Management (“ERM”) framework. Nonetheless, the Bank’s risk management techniques and internal control policies and procedures may not be fully effective in mitigating its risk exposure in all market environments or against all types of risk, including risks that are unidentified or unanticipated. The Bank is also subject to political, economic and other risks associated with Nigeria and the other countries in which it operates, which cannot be effectively managed. In addition, the Bank is vulnerable to various kinds of other risks which range from, but are not limited to, money transfers fraud, electronic fraud, identity theft, internet and telephone fraud. As the risks posed by these factors constantly change, so do the approaches and techniques used in managing such risk, which include constant monitoring and risk assessment. Conventional risk management framework focused on credit management, operational risk management and market risk in the past. However, emerging trends in fraud indicate that failures in management of information assets and exposures in this area give rise to more emphasis being placed on information security risk management. Other risk management methods depend upon evaluation of information regarding the markets in which the Bank operates, its clients or other matters that are publicly available or otherwise accessible by the Bank. This information may not be accurate, complete, up-to-date or properly evaluated in all instances. The magnitude of the potential impact of the foregoing risks may be compounded as the Bank grows its business in the future. Any failure in the Bank’s risk management may have a material adverse effect on its business, results of operations and/or financial condition.

There can be no assurance that the Bank’s risk management and internal control policies and procedures will adequately control, or protect the Bank against, all credit and other risks to which it is subject. Certain risks are unidentified or unforeseeable, and could be greater than the Bank’s empirical data would otherwise indicate. In addition, the Bank cannot guarantee that all of its staff will adhere to its risk management and internal control policies and procedures. Moreover, the Bank’s growth and expansion may affect its ability to implement and maintain stringent internal controls. The Bank’s risk

management and internal control capabilities are also limited by the information, tools and technologies available to the Bank. Although the Bank believes that its financial systems are sufficient to ensure compliance with the requirements of applicable laws, any material deficiency in its risk management or other internal control policies or procedures may expose the Bank to significant credit, liquidity, market or operational risk, which may in turn have a material adverse effect on the Bank’s business, results of operations and/or financial condition.

The Bank is subject to interest rate risk

The Bank is exposed to interest rate risk through the interest-bearing assets and liabilities in its trading and banking books. Fluctuations in interest rates could adversely affect the Bank’s operations and financial condition in a number of different ways.

An unfavourable movement in interest rates generally could decrease the value of fixed rate debt securities in the Bank’s investment portfolio (primarily comprised of FGN Bonds). In addition, an increase in interest rates may reduce overall demand for new loans and increase the risk of customer default, while general volatility in interest rates may result in a gap between the Bank’s interest rate sensitive assets and liabilities, particularly given the Bank’s reliance on short-term liabilities to fund longer-term assets. Further, declines in interest rates could reduce the Bank’s customers’ time deposits as well as reduce the interest received on the Bank’s investments.

Interest rates are sensitive to many factors beyond the Bank’s control, including the policies of the CBN, domestic and international economic conditions and political factors. The Bank’s objective for management of interest rate risk is to ensure a higher degree of interest rate margin stability and lower interest rate risk over an interest rate cycle. The Bank endeavours to achieve this by hedging material exposures with the external market. However, the Bank’s operations remain subject to the risk of interest rate fluctuations to the extent that interest-earning assets and interest-bearing liabilities mature or reprice at different times or in differing amounts. These risks impact both the earnings and the economic value of the Bank which, if material, could have a material adverse effect on the Bank’s business, results of operations and/or financial condition.

The Bank may not be able to fully comply with anti-money laundering regulations, which could result in governmental fines and a damaged reputation or impact the market price of the Bonds

The Bank is required to comply with a variety of anti-money laundering, anti-terrorism laws and other regulations in Nigeria. However, the Bank’s policies and procedures aimed at detecting and preventing the use of its banking network for money laundering and terrorist activities are unlikely to eliminate the risk that the Bank may be used by other parties to engage in money laundering and other illegal or improper activities. In common with other banks in Nigeria, the Bank continues to face ongoing risks relating to corruption and potential money laundering schemes perpetrated by individuals and companies in Nigeria.

Corruption and money laundering have been and continue to be identified by external analysts as significant issues in Nigeria. As a result, the Nigerian government has sought to implement various measures to prevent and fight these issues, including enactment of the updated Money Laundering (Prohibition) Act of 2011, as amended by the Money Laundering (Prohibition) (Amendment) Act of 2012, as well as the Terrorism (Prevention) Act of 2012, as amended by the Terrorism (Prevention) (Amendment) Act of 2013, which requires financial institutions to monitor certain customer financial transactions more closely for evidence of money laundering and increase the reporting requirements of financial transactions by financial institutions. In addition, the CBN now requires banks to ensure that their customers who are “designated non-financial institutions” (which include dealers in jewellery, cars and luxury goods, supermarkets, hotels and casinos) are registered with the Special Control Unit on Money Laundering of the Federal Ministry of Trade and Investments prior to establishing a business relationship with them.

The Nigerian government also established the Economic and Financial Crimes Commission (“EFCC”) in 2004 under the EFCC (Establishment) Act, Act No. 1 2004, whose purpose is to investigate all economic and financial crimes including, amongst others, advance fee fraud money laundering, counterfeiting and futures market fraud. As part of its mandate the EFCC has recovered and continues

to recover funds from former government officials, particularly funds that were diverted from government sources under the previous Presidential administration.

To the extent that the Bank fails to fully comply with applicable laws and regulations, the relevant government agencies to which the Bank reports have the power and authority to impose fines and other penalties on the Bank, including the suspension or removal of its banking licence. The Bank’s business and reputation could also suffer as a result of the imposition of any such penalties or any allegations relating thereto, which could, in turn, have a material adverse effect on the Bank’s business, results of operations and/or financial condition.

TAX CONSIDERATIONS

Income accruing in, derived from, brought into, or received in Nigeria in respect of dividends, interest, royalties, discounts, charges or annuities is subject to tax. Interest payments on Bonds derived from Nigeria and accruing to investors are generally subject to withholding tax at the rate of 10%. Where the holder of the Bonds is a foreign entity or person, who is resident in a country with which Nigeria has entered into a double taxation treaty that has been ratified by the Nigerian Government, the applicable rate of withholding tax is 7.5%. The Issuer would, therefore ordinarily be required to withhold tax on such payments and remit same to the tax authorities, subject to the exemptions outlined below.

The Companies Income Tax (Exemption of Bonds and Short-Term Government Securities) Order, 2011 (“Order”) and the PITA exempt income and interest earned by holders of bonds issued by corporate bodies from the imposition of income tax under the CITA and PITA respectively. The exemption granted under the Order is for a period of 10 years commencing from 2 January 2012 while there is no similar limitation in respect of the exemption under PITA. Thus, the Issuer will not be required by law to withhold tax on Coupon payments to the Bondholders in respect of the Bonds. In relation to Bonds with a maturity date later than 2 January 2022, the Issuer may be required by law to withhold tax on Coupon payments to the Holders that are corporate entities under the CITA while there may continue to be an exemption for Holders that are individuals under the PITA.

Furthermore, the proceeds from the disposal of the Bonds are exempt from tax imposed under the VAT Act by virtue of the Value Added Tax (Exemption of the Proceeds of the Disposal of Government and Corporate Securities) Order 2011, commencing from 2 January 2012. This exemption is also for a period of ten (10) years from the commencement date of this Order. Thus, VAT will not be payable upon a disposal of the Bonds during the subsistence of the Order. However, upon termination of the exemption period on 2 January 2022, where the Bonds remain outstanding, the proceeds of the disposal of the Bonds could be held by the FIRS to be subject to VAT.

In addition, the Value Added Tax (Exemption of Commissions on Stock Exchange Transactions) Order, 2014 exempts (a) commissions earned on traded value of the shares, and (b) commissions payable to the SEC, The NSE and the CSCS from VAT for a period of five years from the commencement date of the order i.e. 25 July 2014. Accordingly, any commission payable to the CSCS, SEC or The NSE in connection with the Bonds will be exempt from VAT for a period of five (5) years from the commencement date of this Order i.e. until 24 July 2019. After this date, Holders may be required to pay VAT on any commission payable to the CSCS, SEC or The NSE in connection with the Bonds. This exemption only applies to trading of securities on The NSE and does not extend to the FMDQ. Therefore, Holders may have to pay VAT on fees payable in connection with Bonds traded on the FMDQ.

Both the Order and the PITA refer to “bonds” and do not have a definition of the word. Therefore, it is not clear whether the exemption in the Order and the PITA will apply to the Bonds with a maturity of one year to three years. Having said this, the above analysis in respect of the tax status of the Bonds will also apply to the Bonds that have a maturity of between two years and three years. This is because the FGN has classified its saving instruments with maturity of two years and three years as bonds. This suggests that the FGN regards securities with a term of two years and above as bonds. Therefore, same treatment will be accorded to short term instruments issued by corporate bodies that have two or three years maturity period. The position is less clear in relation to Bonds with a maturity period of less than two years but exceeding nine months (“Short-Term Bonds”). However, given that the Short-Term Bonds will still be registered with the SEC and the SEC has classified instruments with a maturity (at the time of issuance) not exceeding nine (9) months exclusive of days of grace as those that do not require its registration, we believe that Short-Term Bonds should have the same tax treatment as Bonds with a maturity of over two years. This means that income from the Short-Term Bonds should not be liable to tax pursuant to the PITA and the Order in the manner already described above. This is because if the FGN had the intention for the exemption not to apply to bonds with less than two years maturity, it would have done that. Notwithstanding this, the FIRS could take the position that the Short-Term Bonds do not qualify as “bonds” under the Order and the PITA. The FIRS could, therefore, argue that the exemption under the Order and the PITA does not extend to such Short-Term Bonds. Should the FIRS take this position, Coupon payments on the Short-Term Bonds could become liable to the withholding of tax.

There is a risk that gains derived from disposal of the Bonds will be liable to capital gains tax under the CGT Act. The CGT Act provides that any gain paid, used or enjoyed in or in any manner or form transmitted or brought to Nigeria shall be treated as being derived from Nigeria for the purposes of the CGT Act. In the case of an individual who is in Nigeria for a temporary purpose only and does not have any view or intent to establish his residence in Nigeria, such gain will be subject to capital gains tax if the period or sum of the periods for which he is present in Nigeria in that year of assessment exceeds 182 days.

The foregoing summary is not a comprehensive summary, and does not constitute advice, on tax to any actual or potential purchaser of Bonds issued under the Programme. In addition, it does not constitute a representation by the Issuer or its advisers on the tax consequences of a subscription or purchase of Bonds issued under the Programme. Any tax consideration that may be relevant to a decision of a person to acquire, hold or dispose of Bonds issued under the Programme and to each actual or potential purchaser of the Bonds may vary. Therefore, any actual or potential purchaser of the Bonds who intends to ascertain his/her tax position should seek professional advice from his/her preferred professional advisers as to the tax consequences arising from subscribing to or purchasing the Bonds. Neither the Issuer nor its advisers shall be liable to any subscriber or purchaser of the Bonds in any manner for placing reliance upon the contents of the above summary.

Except as otherwise indicated, this summary only addresses Nigerian tax legislation, in effect and in force at the date hereof and as interpreted and applied by the courts or tax authorities in Nigeria, without prejudice to any amendments introduced at a later date and implemented with or without retroactive effect.

NIGERIA – AN OVERVIEW (i) General Overview

The Federal Republic of Nigeria is located in West Africa and consists of 36 states and the Federal Capital Territory, Abuja, which is located in north central Nigeria. Nigeria is the largest oil producing country in Africa with a GDP of US$372.2 billion and a relatively low GDP per capita of US$1,959 as at 2017. The economy is heavily dependent on the oil sector, which accounts for 92.5% of the country’s total export revenues.

GDP performance in recent years is increasingly supported by growth in the non-oil sector, with the biggest growth drivers being agriculture, telecommunications, manufacturing and trade.1 Real GDP in the non-oil sector grew by 0.5% in the fourth quarter of 2017 compared to Real GDP growth in the non- oil sector over the same period in 2016, due primarily to growth in agriculture, finance and insurance, electricity, gas, steam and air conditioning supply as well as and other services. The emerging growth in GDP reflects a renewed focus on economic diversification, increased efforts at promoting growth in the private sector, recovering oil production, some recovery in non-oil industries and modest growth in agriculture.

Nigeria has made progress in socio-economic terms over the last 15 years, however, Nigeria still faces key developmental challenges, which include reducing the dependency on the oil sector and diversifying the economy, addressing the infrastructure gap, and building strong and effective institutions, as well as governance issues, public financial management systems, human development indicators, and the living conditions of the population.

(ii) Demographics

Nigeria is located in West Africa and has a total area of 923,768 km² and is bordered by the Republic of Benin to the west, Niger and Chad to the north, Cameroon to the east and the Gulf of Guinea/Atlantic Ocean to the south.

Nigeria is the most populous country in Africa, with a population of approximately 190 million as at July 2017 according to the 2017 UNDP’s World Population Prospects.2 Nigeria has a relatively young population, with 4% of the population aged 60 years and above, 19% between the ages of 15 and 24, 32% between the ages of 25 and 59 and 44% under 15 years of age, as of 2017. The World Bank estimated the average population density for the country at 195 people per square kilometre in 2014 and at 200 people per square kilometre in 2015. Nigeria’s population is unevenly distributed across the country.

Approximately 49% of Nigerians are urban dwellers, with the urbanization rate estimated at 4.3%. Nigeria is home to over 250 ethnic groups, with over 500 languages, and the variety of customs, and traditions among them gives the country great cultural diversity. The three largest ethnic groups are the Hausa and the Fulani with 29% of the population; along with the Yoruba and Igbo (Ibo) with 21% and 18% of the population respectively.

Nigeria is the most populous country in Africa with significant population clusters scattered throughout the country. The highest density areas are in the south and southwest as Lagos remains Nigeria’s largest city as well as the country’s commercial centre with a population of approximately 13.1 million people. In addition to Lagos, the top three most populated cities in Nigeria are made up of Kano (c.3.5 million) and Ibadan (c. 3.2 million).

1 GDP Statistics Source: Nigerian Bureau of Statistics 2 CIA World Factbook

(iii) Political Structure and Government

Nigeria returned to democratic governance in 1999 with the election of Chief Olusegun Obasanjo, a member of the People’s Democratic Party (“PDP”) as President and Commander in Chief of the Armed Forces, following many years of military rule. The Obasanjo administration commenced the implementation of policies aimed at diversifying the economy to reduce reliance on the oil and gas sector, improving macroeconomic stability and developing the nation's infrastructure.

Nigeria gained independence from the United Kingdom on 01 October 1960 and became a Republic in 1963. Seven military governments have ruled the country at various times for 28 of its 51 years of independence. In 2007, Nigeria witnessed its first ever transition from one democratically elected government to another with the election of Alhaji Umaru Musa Yar’Adua, also a member of the PDP. Following the death of Alhaji Umaru Yar'Adua nearly three years into his term in 2010, the vice president, Goodluck Jonathan, took office for the last year of the late president's term before being elected to a full presidential term in 2011.

In 2015, President Muhammadu Buhari, the candidate of the All Progressives Congress (“APC”) party, became the first Nigerian presidential candidate to defeat an incumbent president after defeating Goodluck Jonathan in what many considered a peaceful election. Policy priorities for the Buhari administration include boosting infrastructure investment and diversifying the economy by targeting investment at specific sectors (notably agriculture and solid minerals). He has also communicated other key focus areas of priority, which include – anti-corruption and security.

Nigeria’s democracy is based on a federal form of government comprising the executive, legislature and judiciary as defined by the Constitution of The Federal Republic of Nigeria 1999. Executive powers are vested in the President who is the Head of State and presides over the Federal Executive Council, while legislative powers are vested in the National Assembly comprising a 109-seat Senate and a 360- seat House of Representatives. Judicial powers rest with the courts, the highest of which is the Supreme Court of Nigeria.

Nigeria consists of 36 states and the Federal Capital Territory, Abuja, which is located in north central Nigeria. The executive government of each state is headed by an elected state governor and the legislature of each state consists of a unicameral House of Assembly. The Federal Capital Territory is administered by a designated Minister appointed by the President while legislative powers for the territory are vested on the National Assembly.

The states and the Federal Capital Territory are grouped into six geopolitical zones: North West, North Central, North East, South East, South South and South West. There are currently 774 constitutionally recognized local government areas (LGA) in Nigeria. Each LGA is administered by a Local Government Council consisting of a chairman who is the Chief Executive of the LGA, and other elected members who are referred to as Councillors. Each of the LGAs are subdivided into a minimum of ten and a maximum of fifteen wards.

(iv) The Nigerian Economy

The Nigerian economy is highly dependent on the oil sector, which, in 2016, accounted for 8.2% of real GDP and 92.5% of export earnings. In the third and fourth quarters of 2017, the oil sector contributed 10.04% and 7.17% of the total real GDP respectively. Overall, for the full year 2017, oil contributed 8.68% of the full-year GDP.

Dependence on the oil sector makes the economy vulnerable to oil price fluctuations. The collapse of crude oil prices on account of the global economic slowdown resulted in lower oil revenues for the government and ultimately led to a contraction in the economy. In the first, second, third and fourth quarters of 2016, Nigeria experienced contractions in real GDP of (0.7)%, (1.5)%, (2.3)% and (1.7)%, respectively, and (0.5)% in the first quarter of 2017. This contraction was largely influenced by and attributable to a number of factors including but not limited to a decline in consumer spending, record-

high inflation, pipeline vandalisation in the Niger Delta region, depletion of foreign reserves, and the weakening of the Naira against foreign currencies.

The GDP however grew in the fourth quarter of 2017 by 1.92% (year-on-year) in real terms. Overall, for the year 2017, Nigeria recorded a real annual GDP growth rate of 0.83%, compared to the (1.58%) contraction recorded in 2016. For the first quarter of 2018, GDP growth slowed by 0.16% to 1.95% compared to 2.11% recorded in the fourth quarter of 2017. However, this represents a year on year growth of 2.87% compared to 0.91% GDP contraction in the first quarter of 2017.

Government policy has focused on improving infrastructure and reforming other key sectors, such as power and agriculture, which remain impediments to speedy, economic growth. The CBN is currently supporting growth in the rest of the economy through small and medium scale enterprises and the agricultural sector, with initiatives such as the Anchor Borrowers Programme which allows participants in the agricultural value chain to access credit at single digit rates of interest. Furthermore, the CBN is in the process of improving the implementation of its current policies, aimed at achieving a market- determined exchange rate regime to build confidence and encourage foreign exchange inflows.

A summary of recent macro-economic indicators for Nigeria is shown below.

Economic indicators 2012 2013 2014 2015 2016 2017 Population (mn) 167.3 171.8 176.5 181.2 186.0 190.0 Nominal GDP (US$bn) 461.0 515.0 568.5 493.8 405.4 372.2 Real GDP growth (%) 4.3% 5.4% 6.3% 2.7% -1.6% 0.8% GDP per capita (US$) 2,755 2,997 3,222 2,726 2,180 1,959 Inflation (%) 12.2% 8.5% 8.1% 9.0% 16% 15.4% Exchange rate (NGN/US$) 157.5 157.3 158.6 192.7 253.0 305.5 FX reserves (US$bn) 41.3 40.3 32.0 26.7 25.8 38.8 Source: Economist Intelligence Unit

The emerging growth in GDP reflects a renewed focus on economic diversification, increased efforts at promoting growth in the private sector, recovering oil production, some recovery in non-oil industries and modest growth in agriculture. The non-oil sector is expected to be the main driver of the country’s economy in the future.

3 GDP Statistics Source: Nigerian Bureau of Statistics

Contribution to Real GDP Q4 2017

20%

54%

26%

Services Agriculture Industries . Source: National Bureau of Statistics

For Q4 2017, the contribution of services, agriculture and industries to GDP were approximately 53.4%, 26.2% and 20.4% respectively. For full year 2017, the services, agriculture and industries contributed approximately 52.7%, 25.1% and 22.3% to the GDP respectively.

OVERVIEW OF THE NIGERIAN BANKING SECTOR

The Information in this section has been derived substantially from publicly available information, such as annual reports, official data published by the Nigerian government or regional agencies or other third-party sources as extracted from publicly available data obtained from organizations such as the CBN, NBS, the International Monetary Fund and other sources believed to be reliable. There is not necessarily any uniformity of views amongst such sources as to such information provided. The Bank has relied on the accuracy of this information without independent verification and makes no representation as to its accuracy. The Nigerian banking sector currently consists of 28 licensed banks, comprising 22 commercial banks, five merchant banks and one specialised bank with banking licenses to provide financial services to institutional, commercial, and retail clients. There are also currently 942 licensed microfinance banks in Nigeria as of February 2018. Over the years, the banking sector has undergone several regulatory driven reforms generally classified into phases.

2009 CBN intervention

In June 2009, the CBN embarked on a systemic reform of the banking sector to assist and support the sector in overcoming the 2008-2009 global financial crisis and its impact. The reform was founded on four key pillars: enhancing the quality of the banks, establishing financial stability, enabling the evolution of a healthy financial sector and ensuring the financial sector contributes to the real economy. Following a joint examination conducted in May 2009 by the CBN and Nigeria Deposit Insurance Corporation (“NDIC”), it was discovered that 10 out of the then 24 Nigerian commercial banks exhibited the following negative characteristics: substantial non-performing loans, poor corporate governance, capital adequacy deficiencies and illiquidity. The Asset Management Company of Nigeria (“AMCON”) was established in 2010 to buy bad debts off the Nigerian banks’ balance sheets. The industry witnessed another round of mergers and acquisitions such as Ecobank Transnational Inc’s acquisition of Oceanic International Bank PLC and the merger of the latter with Ecobank Nigeria, the merger of Finbank PLC with First City Monument Bank PLC, the merger of Intercontinental Bank PLC with Access Bank PLC, and the acquisition of Equitorial Trust Bank Limited by Sterling Bank PLC. The CBN’s rationale behind the intervention was to resolve liquidity challenges in the country’s banking system and to restore stability and confidence to the banking sector. At the expiration of the CBN’s deadline for the intervened bank to be recapitalised, 3 of the intervened banks had not been recapitalised; this situation led to the CBN revoking the licenses of the 3 banks: Spring Bank (Enterprise Bank), Afribank (Mainstreet Bank), and Bank PHB (Keystone Bank) (referred to as “Bridge Banks”). The NDIC formed the Bridge Banks to purchase and assume all the assets and some of the liabilities of the intervened banks.

Further to this, AMCON purchased the nominal shares of NDIC in the Bridge Banks and subscribed for the capital increase in the three banks and capitalised the banks in exchange for 100% share ownership of the Bridge Banks by bringing the net asset value to zero and taking the banks beyond regulatory required capital adequacy. AMCON in exchange for absorbing the eligible bank assets (bad loans), issued zero-coupon government-backed bonds. On a related note, the CBN restored the banking licences of Societe General Bank Limited (now known as Heritage Banking Company Limited) and Savannah Bank PLC (not currently operating).

In 2014, AMCON concluded the sale of its entire equity stakes in Enterprise Bank Limited to HBCL Investment Services Limited (a special purpose vehicle sponsored by Heritage Banking Company Limited) and Mainstreet Bank Limited to Skye Bank PLC for N56.1 billion and N126 billion respectively. In 2016, a year after Skye Bank PLC’s acquisition of Mainstret Bank Limited, the CBN intervened to address certain concerns regarding Skye Bank PLC’s liquidity, capital adequacy and corporate governance. In 2017, AMCON concluded the sale of Keystone Bank Limited to Sigma Golf-Riverbank Consortium (comprising Sigma Golf Nigeria Limited and Riverbank Investment Resources Limited) for N25 billion. Post the intervention by the CBN, Union Bank remains the only intervened bank which still subsists today.

Repeal of the Universal Banking Model and introduction to Reg 3

In October 2010, the CBN repealed the universal banking guidelines and issued new rules and guidelines for the banking sector - “Regulation on the Scope of Banking Activities & Ancillary Matters, No. 3, 2010” (“Regulation 3”) aimed at streamlining banking operations in Nigeria as well as reducing the exposure of the banks to higher operational risks. Under Regulation 3, only commercial banks, merchant banks, and specialized banks (which include non-interest banks, microfinance banks, development banks, and mortgage banks) are permitted to carry out banking businesses in Nigeria. This rule effectively required banks to divest from all non-banking business or to adopt a non-operating holding company structure in compliance with the regulation. Under Regulation 3, commercial banks were also required to maintain a minimum paid up share capital of N10 billion for institutions granted a regional banking license, N25 billion for institutions granted a national banking license and N50 billion for institutions granted an international banking license. On the other hand, merchant banks are required to have a share capital of N15 billion and specialised banks a capital of N10 billion.

The CBN believed the erstwhile universal banking regime exposed the banking business to greater risks that challenge the stability of the financial system. The risks arose because most banks have limited skills to cover the entire banking spectrum in the banking group, resulting in increased risk from affiliate transactions, improper allocation of depositors’ funds to high risk businesses such as proprietary trading and investments, and weak group corporate governance structures. The objective of the new model is to make banks focus on their core banking business and develop specialization.

Issuance of Merchant Banking License

In 2012, the CBN issued the first merchant banking licenses in more than a decade to Rand Merchant Bank Nigeria Limited and FSDH Merchant Bank Limited (formerly First Securities Discount House Limited). These two banks were the first merchant banks to be licensed since the CBN reintroduced merchant banks which were phased out following the advent of universal banking in 2004. There are currently five merchant banks operating in Nigeria. As indicated above, merchant banks are required to have a capital base of N15 billion.

Monetary Policy In an effort to attain bank soundness and manage liquidity effectively, the CBN introduced in 2006 a new framework for monetary policy implementation in the marketplace using the short-term interest rate as its benchmark rate. The benchmark rate, the MPR, serves as an indicative rate for transactions in the interbank money market as well as money market rates. The ultimate goal of the new framework is to achieve a stable value of the Naira through stability in short-term interest rates around the MPR which will be determined and operated by the CBN. The MPR replaced the then-existing Minimum Rediscount Rate and was set at 10.0% using the then-current rate of inflation and the expected inflation rate outcome of 9.0% for the 2007 financial year as a guide to ensure that interest rates remain positive in real terms. The main operating principle guiding the new policy was to control the supply of settlement balances of banks and motivate the banking system to target zero balances at the CBN, through an active interbank trading or transfer of balances at the CBN. The aim of this was to engender symmetric treatment of deficits and surpluses in the settlement accounts, so that for any bank, the cost of an overdraft at the CBN would be equal to the opportunity cost of holding a surplus balance with the CBN.

As at January 2014, the MPR stood at 12% and in November 2014 the Nigerian MPC raised the MPR to 13% where it remained until it was reduced to 11% in November 2015. At the CBN’s July 2016 MPC meeting, the MPC voted to increase the MPR by 200 basis points from 12% to 14% and retained the CRR at 22.5% The MPR and the CRR have been retained at 14% and 22.5%, respectively, since then.

The average NIBOR dropped across all tenors for the eight months ended 31 August 2016 compared with the averages across all tenors for the year ended 31 December 2015. This drop in rates was due in part to the release of statutory allocations, other intervention funds and huge government maturities which came into the market in the course of 2016. As at 31 December 2017, the overnight, one month, three months and six months NIBOR tenors were 11.5%, 19.0%, 20.2%, and 22.0%, respectively.

The CBN has continued to pursue a tight monetary stance by ensuring price and exchange rate stability. This has been evidenced by the prevailing single-digit inflation. In April 2013, the CBN began its steady removal of the following bank charges: (i) CoT (from ₦5 per mille to ₦3 per mille in 2013, ₦2 per mille in 2014, ₦1 per mille in 2015 and zero in 2016); (ii) the ₦100 fee on third party ATM withdrawals; and (iii) the ₦100 monthly ATM card maintenance fee. ATM withdrawal fees were subsequently disallowed, but were reintroduced at ₦65 per withdrawal after the third withdrawal from a third party machine. The CBN introduced an account maintenance fee of ₦1 per mille in January 2016, following the complete removal of the CoT. However, on 21 April 2017, the CBN issued the 2017 Guide to Bank Charges which took effect on 1 May 2017 and replaced the 1 April 2013 Revised Guide to Bank Charges. The 2017 Guide to Bank Charges makes the following provisions: (i) completely removes CoT, and imposes (ii) a ₦65 fee on third party ATM withdrawals after the third withdrawal within the same month, (iii) an electronic funds transfers fee of ₦50, (iv) a Naira debit/credit card maintenance fee of ₦50 monthly, foreign currency denominated debit/credit cards maintenance fee of U.S.$20 per annum (or its equivalent), and (v) credit/debit card one-off issuance, replacement or renewal fee of ₦1,000 each.

In July 2013, the CBN MPC raised the CRR on public sector deposits to 50% from 12%. The CRR mandates banks to keep 50% of public sector funds, which comprise deposits of all tiers of government as well as ministries, departments and agencies, with the CBN. The initiative is meant to check “the perverse incentive structure” under which DMBs source huge amounts of public sector deposits and lend same to governments, and curb the liquidity surplus in the banking industry and the associated threat to the Naira value. The implementation of this policy led to the withdrawal of ₦1 trillion from the Nigerian banking system and corresponding loss of ₦45 billion (approximately U.S.$281 million) of lost interest income for Nigeria’s banking industry, according to analysts.

The immediate effect of this was witnessed as the cost of funds rose sharply. NIBOR, which had inched upwards since the policy announcement, peaked at 44% in September 2013 according to data made available by the Financial Market Dealers Association. Over the subsequent seven trading days following the announcement, there was a 907 bps hike in NIBOR, after which the rates normalised.

Again, in January 2014, the MPC raised banks’ CRR on public sector deposits to 75% from the previous 50% effective 4 February 2014. This was in line with the CBN’s efforts geared towards engendering real intermediation by banks through even allocation of resources to all sectors of the economy. The increase in CRR led to approximately ₦750 billion being withdrawn from the Nigerian banking system and thus caused a spike in Nigerian interbank lending rate to 18.0% as witnessed on 6 February 2014, compared to a rate of 10.3% the previous day. The CRR on the private sector was raised to 15.0%, from 12.0% in March 2014, and further to 20.0% in November 2014 so as to curb the pressure on the exchange rate. The CBN also devalued the Naira and adjusted the midpoint of the official exchange rate to ₦168/U.S. dollar from ₦155/U.S. dollar.

In February 2015, the CBN adopted a de facto devaluation of the Naira by selling at the interbank market at a higher rate of ₦198.5, compared to ₦168 previously. This was aimed at contracting the premium between the official and parallel market rates. In May 2015, the CBN harmonised the CRR at 31% and cut it further to 25% in September 2015, in a bid to build system liquidity to support increased lending. By November 2015, the CBN shifted to an accommodative monetary policy stance and cut the MPR by 2% to 11% while the corridor around the MPR was adjusted to +2%/-7% from +2%/-2% previously. The CRR was also cut to 20% from 25% previously, but was conditioned on lending to the real sector.

In March 2016, the CBN readopted a tight stance as the MPR was increased to 12% in order to curb inflationary pressures, and further to 14% in July 2016. The corridor around the MPR was adjusted to +2%/-5% while the CRR was raised to 22.5% Sustained inflationary pressures led the CBN to announce on 20 June 2016 that it was abandoning its previous policy of pegging the Naira to the U.S. dollar and instead reintroducing market-driven currency trading under a flexible exchange rate system in which the CBN would only intervene for a select number of items deemed critical by the Government. The CRR was retained at 22.5% while the MPR has remained at 14% through March 2018.

Foreign Exchange Following a sharp decline in oil prices at the international market, the ensuing fall in foreign exchange earnings and the widening margin between the inter-bank exchange rate and the Official Rate, prompted speculative activity by economic actors. These put pressure on foreign exchange reserves which caused the CBN to close the official foreign exchange auction window in 2015.

In 2016, average monthly FX sales by the central bank fell to around USD1.4bn from USD2.0bn in 2015 and about USD3.2bn between 2013 and 2014 according to CBN data. In short, between 2015 and 2016, FX supply by the CBN more than halved from USD38.0bn in 2014 to USD16.8bn in 2016. The portfolio outflows of some USD12.4bn between 2014 and 2015 also exacerbated the FX supply-demand imbalance. At its height the backlog in demand for FX topped USD6.0bn. This comprised demand for goods imports as well as invisibles such as income remittances, payment for services and capital outflows.4

In June 2016, the CBN commenced operation of a liberalized single market structure with the introduction of an autonomous inter-bank foreign exchange market, thereby terminating the CBN pegging of the Naira to the U.S. dollar. Under that policy, the CBN continued to intervene in the interbank market as required to meet genuine and legitimate demands in the single market (for the primary purposes of improving liquidity and volatility management) by purchasing or selling foreign exchange at no predetermined or maximum spread through the two-way quote system.

In October 2016, the CBN approved Special Secondary Market Intervention Sales (“SMIS”) for airlines operating in the country to enable them to access foreign exchange. On December 23, 2016, the CBN sold foreign exchange worth N1 billion on the forward market to clear a backlog of dollar obligations in selected sectors.

In February 2017, the CBN authorized the sale of foreign currency for personal travel allowances in the amount of $4,000 per quarter per qualified applicant and for qualified school fees in the amount of $15,000 per term or semester. In March 2017, the CBN directed all banks to adopt certain measures aimed at facilitating and expediting authorized retail sales of foreign currency. The CBN then created yet another FX market by introducing the IEFX in April 2017 with the intent to increase liquidity in the foreign exchange market in Nigeria and ease the FX supply-demand mismatch and ensure the timely execution and settlement of eligible transactions. To promote liquidity and professional market conduct, the CBN is also a market participant at the IEFX Window.

To further ensure a free flow of foreign currency for certain purposes, in February 2018, the CBN issued a directive to all Authorised Dealers, abolishing the charging of commissions on retail foreign exchange transactions such as Business Travel Allowance, Personal Travel Allowance, payment of medical bills and school fees.

Research estimates suggest that a majority of the current backlog of c.US$ 2.0bn comprises mostly obligations between local subsidiaries of multinational companies and their parent companies. Given the increase in FX liquidity recently, it appears as if some of these multinationals are reasonably comfortable retaining credit exposures to their local subsidiaries and may, in fact, be exploring the possibility of converting such obligations into either debt or equity capital. Domestically-owned entities appear to have met a substantial portion of their accumulated import obligations.

The CBN has reiterated its commitment to sustaining market interventions to promote supply and liquidity while striving also to achieve exchange rate stability. This ability to boost FX sales has been underpinned by rising oil exports as well as a number of one-off payments into reserves. The level of foreign exchange reserves in the near term and over the next few years will depend on the price of crude oil in the international market, the cost of continued funding of imports and foreign capital flows.

Mobile Money and Cashless Policy The CBN introduced a new policy that aims to reduce the amount of tangible cash circulated in the economy and encourage electronic based transactions (payments for goods, services, transfers, etc.). CBN stipulates charges for daily cash withdrawals or cash deposits exceeding ₦500,000 for individuals and ₦3,000,000 for corporate entities. The policy has, amongst others: - driven the development and modernization of payment system closer to Nigeria’s 2020 goal of being amongst the top 20 economies by the year 2020.

4 Source: Standard Bank Research

- reduced the cost of banking services by providing more efficient transaction options and greater reach; and - improved the effectiveness of monetary policy in managing inflation and driving economic growth. Mobile money is a product of banking sector IT innovations and the drive for financial inclusion and was introduced by the CBN to allow for the transfer of money using phones. It ties in with the CBN’s objectives to achieve a cashless society and it reduces the cost and risks associated with physical (traditional) banking transactions. The service enables customers to open a mobile money account to store an electronic value of money to their mobile phones, using their mobile number as an account number. Customers are also able to transfer money to any mobile number, spend the money directly from their mobile money account to pay for goods as well as to buy airtime for themselves and others. Use of Bank Verification Number (“BVN”) The CBN, in conjunction with the Bankers Committee, introduced a financial inclusion strategy targeted at increasing access to financial services for many Nigerians at reduced cost. Following the introduction of “cashless policy” in 2013, the CBN kicked off the Bank Verification Number (“BVN”) project in February 2014. The BVN initiative aims to allocate a unique identification number to every customer which can be verified in the Nigerian banking system. The objectives are to improve banking reach, capture customers’ data, reduce fraud, and enhance credit growth over the long term.

Over 2,000 BVN machines were deployed in 2014 to facilitate the enrolment process. An initial deadline of 30 June 2015 was set by the CBN for the completion of the BVN enrolment exercise but was extended to 31 October 2015. According to the CBN, the extension was expected to facilitate a smooth completion of the registration exercise.

The CBN stipulated a purportedly final deadline of 31 December 2017 for the customers of other financial institutions to enrol and/or submit their BVN details. Following this, the CBN issued a directive in January 2018 mandating other financial institutions to place all accounts without BVN on a “post no debit status”. However, credit lodgements may be received into such accounts.

Recent Policies and Developments

 As at 31 December 2017, the total assets and liabilities of commercial banks stood at N34.6 trillion,5 which represents a 3.9% increase from September 2017. Banks’ credit to the domestic economy declined by 5.5% to N20.4 trillion6 over the same period.  At the 116th Monetary Policy Committee (MPC) meeting in November 2017, the MPC noted that although there was an improvement in economic growth in Nigeria, non-oil sectors of the economy were not showing robust growth as evidenced by the 0.76% year-on-year contraction in Q3 2017. The committee also noted the persistent improvements in manufacturing and non- manufacturing PMIs even as it acknowledged the tight policy stance adopted by the CBN, most evidently shown by contracting money supply and credit to the private sector.  In consideration of the challenges still facing the domestic economy and uncertainty in the global environment, the MPC retained the following policies for the banking sector: o Monetary Policy Rate at 14% o CRR at 22.5% o Liquidity Ratio at 30%  In April 2017, the CBN through a circular issued to Deposit Money Banks suspended charges on over-the-counter or ATM withdrawal above N500,000 or deposit of the same amount effective from 1 April 2017.

5 Central Bank of Nigeria - Economic Report (Fourth Quarter 2017) 6 Central Bank of Nigeria - Economic Report (Fourth Quarter 2017)

 The CBN communicated the reversion to previous charges, which are: o 3% on individual lodgments or withdrawals o 5% on corporate accounts for lodgments or withdrawals over N3 million.

OVERVIEW OF UNION BANK OF NIGERIA PLC

History and Overview of Union Bank

Union Bank was first established in 1917 and is a long standing and respected financial institution in Nigeria. Union Bank is a commercial bank with an international banking subsidiary in the United Kingdom.

As at 31 December 2017, the shareholding structure of the Bank consists of:  Union Global Partners Limited (UGPL) (65.31%): UGPL is a consortium of local and international investors  Atlas Mara Limited (24.01%): Atlas Mara Limited is a private equity firm  Diverse base of other shareholders (10.62%)

The Bank offers a portfolio of banking and other financial services to individual, SME, commercial and corporate clients. The Bank serves approximately four million customers, leveraging a mix of branches and a network of alternative channels including multi-channel digital banking platforms such as mobile, online, POS terminals and ATMs. The Bank has a strong geographic network in Nigeria comprising 300 sales and service centres, 7,000 point-of-sale machines and 950 ATMs as at 31 December 2017. The Bank had 2,645 full time employees as at 31 December 2017.

The Bank’s business model covers Retail Banking, Commercial Banking, Corporate Banking and Treasury segments, through which the Bank provides a range of products and services, including deposit products (current and savings accounts and term deposit accounts), loans and advances, corporate and trade services, electronic banking services, money market activities, foreign exchange services, funds transfer services and bank guarantees.

Over the years, the Bank has built a strong and resilient institution, leveraging a strong customer base cultivated by its customer-focused acquisition and retention strategy and maintaining positive financial performance in the face of a challenging operating environment. The Bank intends to continue to strengthen its product offering and service delivery capabilities, to position the Bank as a market leader for transaction banking and superior client service in Nigeria. The Bank’s key aim is to become the leading mid-tier bank by 2018.

The Bank has made significant investments in people, processes and technology in recent years, reinforcing its position as a simpler, smarter bank. Over the last two years, the Bank has won a series of awards including “The Fastest Growing Retail Bank” by International Finance Magazine (2017); “Most Improved Bank in Retail Banking” by Business Day (2016); “Best Bank to Support Nigeria’s Small and Medium Scale Enterprises” by Business Day (2016); “Brand Evolution of the Year” and “Iconic Brand of the Year” by Marketing World Awards (2017). The Bank was also named as “Top 10 Best Companies to Work for in Nigeria” by Jobberman (2017).

The Bank’s consolidated gross earnings for the years ended 31 December 2017, 2016 and 2015 were ₦163.8 billion, ₦129.6 billion and ₦117.2 billion, respectively. The Bank’s consolidated assets as at 31 December 2017, 2016 and 2015 were ₦1,455.1 billion, ₦1,252.6 billion, and ₦1,049.7 billion, respectively, reinforcing the Bank’s position as a solid mid-tier bank.

Union Bank’s Key Business Activities

The Bank offers a portfolio of banking and other financial services to individual, SME, commercial and corporate clients. The Bank serves approximately 4.3 million customers, leveraging a mix of branches and a network of alternative channels including multi-channel digital banking platforms such as mobile, online, POS terminals and ATMs. The Bank has a strong geographic network in Nigeria comprising 300 sales and service centres and 950 ATMs as at 31 March 2017. The Bank had 2,645 full time employees as at 31 December 2017. The Bank’s operations are made up primarily of its retail, commercial, corporate banking and and treasury business. The Bank has the following strategic business segments, which are its reportable segments in its Financial Statements:

 Corporate Banking: The Corporate Banking business segment caters to large corporate clients with turnover of above ₦10 billion, with focus on high traction industries including oil and gas, telecom, general commerce, manufacturing, fast-moving consumer goods, agriculture, aviation and maritime. Products and services offered include transactional banking products, cash management solutions, trade, working capital finance, investment management, overdrafts,

loans and advances and foreign exchange services. Clients are serviced through dedicated relationship managers and a strong electronic platform.

 Commercial Banking: The Commercial Banking business segment focuses on meeting the banking needs of corporates with annual turnover of between ₦2 billion and ₦10 billion. Priority sectors for the commercial banking business include general commerce, manufacturing, agribusiness, construction, education, religion and the public sector. Product offerings to this segment include loans and advances, equipment leasing, local purchase order financing, value chain products, trade financing and cash management solutions. Clients are serviced via a wide commercial hub network of relationship managers and a strong online presence.

 Retail Banking: The Retail Banking segment focuses on identified meaningful sub-segments within mass retail, mass affluent and SME customers with annual turnover of less than ₦2 billion. The Bank provides retail customers with deposit, asset and electronic banking products, combined with complementary white label products.

 Treasury: Treasury supports clients in all segments of the Group such as affluent and high net worth individuals, commercial clients, corporates and non-banking financial institutions. Client offering is composed of a diversified portfolio of products and services including issuance of short term notes, investment management (money market products), fixed income sales and trading.

Board of Directors and Management Team of Union Bank

Board of Directors

Cyril Odu — Chairman

Mr. Cyril Odu joined the Board in 2012 and was appointed Chairman of the Board of Directors in November 2015. Prior to his appointment as Chairman, Mr. Odu was the Chairman of the Bank's Risk Management Committee and served as a member of the Finance and General Purpose and Credit Committees. Mr. Odu has nearly 45 years of professional, managerial and director level experience. His 40-year distinguished career at Exxon Mobil saw him rise from trainee to Vice Chairman of the Board of Mobil Producing Nigeria and Chief Financial Officer of Exxon Mobil Upstream Companies in Nigeria, making him the highest ranking Nigerian in the organisation until his retirement in 2012. In 2008, he served on a presidential committee tasked with accelerating the expansion of Nigeria's power infrastructure. After his retirement from Exxon Mobil in 2012, Mr. Odu joined African Capital Alliance and is currently Chief Executive Officer of the firm.

He has a BSc (Hons) in Geology from the University of Ibadan (1972) and an MBA from Texas Southern University (1980).

Emeka Emuwa – Chief Executive Officer

Mr. Emeka Emuwa was appointed Chief Executive Officer of Union Bank of Nigeria PLC in November 2012. Prior to joining Union Bank, Mr. Emuwa had a distinguished 25-year career at Citi, one of the world’s leading financial institutions. While at Citi, he led the bank's franchises in several Francophone and Anglophone African countries before his appointment as the first Nigerian Country Officer and Managing Director of Citi in Nigeria in 2005 – a role he held until his appointment as Chief Executive Officer for Union Bank.

He is a Director of Africa Finance Corporation and a Fellow of the Chartered Institute of Bankers Nigeria. Chairman of Accion Microfinance Bank Nigeria and Junior Achievement Nigeria. He is also a former Director of the American Business Council.

Mr. Emuwa is a graduate of Finance from the University of Lagos (1982) and holds an MSc. in Management from Purdue University’s Krannert School of Management (1984).

Oyinkansade Adewale – Chief Financial Officer

Mrs. Oyinkan Adewale was appointed as Executive Director/Chief Financial Officer of Union Bank in October 2012. She is a chartered accountant and financial control expert with over 35 years of experience in the audit and financial sectors. Mrs Adewale trained at Coopers and Lybrand, where she worked for eight years till 1989 and from where she proceeded to Nigerian International Bank Limited (a subsidiary of

Citigroup), where she worked till 2003. Mrs Adewale was an Executive Director at Citi and Chief Financial Officer for West Africa, covering seven countries. Mrs. Adewale is a Fellow of the Institute of Chartered Accountants of Nigeria and has held several board and executive positions throughout her career. In 2009, the CBN appointed her as an Executive Director and Chief Financial Officer of Oceanic Bank Nigeria Limited with oversight of all the bank’s 13 subsidiaries, the Risk Management Group, Finance Group and Strategic Planning. She also served as Integration Manager in the merger between Oceanic Bank and Ecobank Nigeria. Mrs. Adewale co-founded SIAO, a leading indigenous accounting firm in Nigeria and was pioneer Managing Director/Chief Operating Officer of Renaissance Group, Africa.

Mrs. Adewale is a 1980 graduate of the University of Ibadan. She has attended management and leadership programmes at the IMD , Lausanne, INSEAD, Fontainebleau and Oxford Said Business School.

Kandolo Kasongo – Chief Risk Officer and Compliance Executive

Mr. Kandolo Kasongo joined the Bank as an Executive Director and Chief Risk Officer in 2013 and has built a 30-year career in the banking industry. He commenced his career, in the area of risk management, at Citibank as Head of Risk and Senior Credit Officer for East, West and North/West Africa successively, based in Johannesburg, Abidjan/Lagos and Cairo. After 27 years at Citigroup, Mr Kasongo then moved to Barclays Bank as Risk Director for Global Retail and Commercial Banking where he had oversight for 14 African countries, the Middle East, India, Pakistan, and Russia. In April 2009 he took up the position of Credit Head for Stanbic IBTC Bank PLC before joining Union Bank.

Mr Kasongo is a 1977 graduate of Faculte Universitaire Catholique de Mons (Belgium).

Emeka Okonkwo – Head, Corporate and Investment Banking

Mr. Emeka Okonkwo joined the Bank in 2013 as an Executive Director, heading the Bank’s Corporate Banking and Treasury business. His career in the banking industry commenced 25 years ago as an officer in Citigroup Nigeria across varying departments such as Corporate Finance, Credit Risk Management, Marketing, Treasury and Strategic Management in Nigeria and London. In 2009, he was appointed to the board of Citigroup Nigeria as an Executive Director for Commercial Banking and Global Subsidiaries and also headed the Global Banking Division of Citigroup Bangladesh where he had responsibility for client relationships within the corporate, financial institutions, public sector and global subsidiaries in the country.

Mr. Okonkwo has a Bachelor’s degree in Civil Engineering from University of Nigeria, Nsukka (1986) and a Master of Science in Construction Management from the University of Lagos (1988). He also holds an MBA from Warwick Business School, UK (2014).

Adekunle Sonola — Head, Commercial Banking

Mr. Adekunle Sonola, has been Executive Director at the Bank since July 2015. Before joining the Bank, Mr. Sonola held various positions in Guaranty Trust Bank, including Managing Director and Group Chief Executive Officer of the Guaranty Trust Bank (Kenya), Executive Director of Guaranty Trust Bank (Kenya) Limited, Group Head of Corporate Banking Mainland, General Manager, Deputy General Manager and Senior Manager of Institutional Banking Division at Guaranty Trust Bank PLC. Mr. Sonola also served as the Head of Client Coverage, Head of CIB Coverage and Distribution, and Head of Corporate & Institutional Banking at Stanbic IBTC Holdings PLC.

He holds a first degree in law from University of Ife (1990) and received an MBA from Durham University in 1999.

Nath Ude – Head, Service and Technology

Mr. Ude joined Union Bank in January 2017 to head Service and Technology. He is a seasoned banker with over 25 years’ experience in both international and Nigerian banking environments. He started his banking career with Citibank in 1990, where he held various roles within operations process management, service quality, cash management, controls and general management in Nigeria, South Africa and India. Mr. Ude left Citibank in 2004 to join Standard Chartered Bank, South Africa where he was the Country Head, Technology and Operations (Wholesale and Consumer Banking). He later left Standard Chartered Bank to join First City Monument Bank in 2007 as Group Head of Operations, before assuming the position of Divisional Head of Operations and Business Support.

He holds a Bachelor’s Degree in Finance from University of Nigeria Nsukka (1987) and an MBA from Bayero University, Kano (1999).

Obafunke Alade-Adeyefa – Non–Executive Director (Independent)

Mrs Obafunke Alade-Adeyefa was appointed to the Board of Union Bank in April 2017. She commenced her career as an accountant with Peat, Marwick, Ani, Ogunde & Co from July 1982 to April 1986. She joined First City Merchant Bank Limited as an Assistant Manager, Treasury in May 1986, where she worked until joining Marina International Bank Limited (Merchant Bankers) in April, 1990. At Marina International Bank Limited, Mrs. Alade-Adeyefa rose to the rank of Group Head, Corporate Banking and Capital Markets Group, before leaving in May of 1996. Mrs Alade Adeyefa acted as Head of Treasury at Texaco Overseas (Nigeria) Petroleum Unlimited from June 1996 to December 2001. Prior to joining Union Bank, she worked with Chevron Nigeria Limited for 15 years during which time Mrs Alade-Adeyefa acted as Managing Director and Chief Executive Officer of Chevron Nigeria Closed Pension Fund Administrator Limited from June 2008 to December 2016. Mrs Alade-Adeyefa serves as a Non-Executive Director on the Board of Linkage Assurance PLC. and is the Treasure of Child Lifeline.

Mrs Alade-Adeyefa holds a Bachelor of Science degree in Economics from Obafemi Awolowo University, Ile-Ife (1981). She is a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN).

Beatrice A. Hamza Bassey – Non–Executive Director

Mrs. Beatrice A. Hamza Bassey is Group Managing Director and General Counsel at Atlas Mara Limited since February 2015 and also serves as its Chief Compliance Officer. Prior to joining Atlas Mara, Mrs. Hamza Bassey was a Partner at the Wall Street Law firm of Hughes Hubbard & Reed LLP, where she was member of the Executive Committee and chaired its Africa Practice Group. She has spent over two decades representing a roster of corporate entities in compliance and corporate governance matters and counselled Corporate Boards and Audit Committees. She has also designed and implemented compliance programs for several financial institutions and of NYSE, FTSE and CAC 40 companies, as well as several companies across Africa, and led regulatory interactions on behalf of those corporations in the US, Europe and across Africa. Just before joining Atlas Mara, she was representing the Trustee for the liquidation of Lehman Brothers, Inc. where she oversaw the allocation and return of billions of US Dollars in customer property to former customers of Lehman Brothers. Beatrice has garnered many international accolades for her work, and has been profiled by Forbes Africa and CNN's African Voices, as a top African lawyer. She has been a Non-Executive Director at Union Bank since July 2015 and BancABC Botswana. She also served as a Board Member at Banque Populaire du Rwanda S.A as well as several other Boards in the United States and Africa. She is a member of the American Bar as well as the Nigerian Bar.

Mrs. Hamza-Bassey received her first degree in Law (LLB) from University of Maiduguri, Nigeria in 1994. She received her Bachelors of Law from Nigeria Law School in 1995 and received her L.L.M. from Harvard Law School in 1998.

John C. Botts – Non–Executive Director

Mr. John Chester Botts, CBE, is a senior adviser to Allen & Company Advisers LLC and Corsair Capital LLC. Other directorships include Brait SE and several private companies. He was formerly the CEO of Citicorp’s Investment Bank in Europe, Africa and Middle East, Chairman of United Business Media PLC and Euromoney Institutional Investor PLC and Director of Songbird Estates PLC. He is a Trustee of the Tate Foundation, the Cleveland Clinic Foundation and Chairman of Glyndebourne Productions Limited.

He graduated with a B.A. from Williams College, Massachusetts in 1962.

Richard Burrett – Non–Executive Director

Mr. Richard Burrett is a Principal at Earth Capital Partners LLP. He is responsible for renewables investment, investment management, and the firm’s relations with the project finance banking community and supports implementation of the sustainability strategy. Prior to that, Mr. Burrett served as the Head of Structured Finance, Head of Corporate Banking, Managing Director, Global Head of Project Finance and Global Head of Sustainability at ABN AMRO Bank. He spent 20 years at ABN AMRO Bank, starting in credit analysis and working through project finance, corporate banking, Head of Project Finance, Head of Structured Finance, UK Head of Corporate Banking, Global Head of Project Finance and Structured Debt Organisation and ultimately originated the Sustainable Development Strategy for the group. He has been a Director at Union Bank of Nigeria PLC since January 2013. He is an external board member of Forest Renewables (part of the Scottish Forestry Commission), looking to develop the renewable energy potential

of its national forestry estate. Mr. Burrett was Co-Chair of the United Nations Environment Programme Finance Initiative (UNEPFI) from 2009 to 2012. He has over 30 years’ experience in International Banking with a deep understanding of project finance and sustainability.

He graduated from Durham University with an MBA in 1993 and a BA (Hons) in German language with Italian, also from Durham University in 1982. He is a Fellow of the Cambridge University Programme for Sustainability Leadership.

Ian Clyne – Non–Executive Director

Mr. Ian B. Clyne has over 35 years International Banking experience having worked in 10 countries in Asia/Pacific, Europe/Central Europe, and Australia. Mr. Clyne has successfully lead major "Transformation & Modernisation" Programs in Banks in Papua New Guinea, Poland, Italy and Indonesia.

His most recent role was Group CEO & MD of Bank South Pacific Ltd (BSP) from 2008-13. Mr. Clyne was Chief Risk Officer & Exec. Director of ING Bank Slanski in Poland, Country Manager & MD of ING Group Italy, President Director & CEO of LippoBank Tbk Indonesia.

He had previously worked as Head of Project & Structured Finance Advisory Asia for ING Group, and Head of Project Finance Natural Resources for Banque Indosuez in France. Mr. Clyne also spent several years as the CEO of Asset Based Finance Companies in China, Hong Kong, PNG, and Australia.

Mr. Clyne was awarded the Queen Elizabeth 2nd "Diamond Jubilee" Medal for services to PNG in 2012. He joined the UBN Board in 2014. He is also currently a Non-Executive Director of GeoPacific Resources Ltd in Australia.

He holds a Bachelor of Business Management Studies from the Curtin University, Perth, Western Australia (also known as the University of Technology, Perth, Australia) which he received in 1978.

Furera Isma Jumare– Non–Executive Director (Independent)

Mrs Jumare was appointed to the Board of Union Bank in February 2017. Her career spans across the banking sector including the Central Bank of Nigeria for 21 years across the following roles including Senior Supervisor/ Agricultural Credit Officer from 1988 to 1991, Assistant Agricultural Credit Manager from 1991 to 1995, Manager/Senior Manager from 1995 to 1997 and Senior Bank Examiner from 2008 to 2009. After her time at the CBN, Mrs Jumare served as the Chief Executive Officer of Micro Development Consulting Limited (MCDL) focusing on research, project management and capacity development.

She holds a Bachelor of Science (B.Sc.) degree in Botany from Ahmadu Bello University, Zaria (1984) as well as the following Masters degrees; Crop Physiology from Ahmadu Bello University, Zaria (1989), Rural development from Ahmadu Bello University,Zaria (2006) and International Development Management from University of Manchester, Manchester, England (2008).

Mrs Jumare has served as Member, Kaduna State Council on Agriculture Fellow, Institute of Management Consultants (IMC) Member, Kaduna State Microfinance Policy Implementation Committee Associate Member, Women in Business, Management and the Public Sector (WIMBIZ).

Richard Kramer (OFR) — Non-Executive Director

Mr. Richard (Dick) Lee Kramer is the Chairman, Partner and Founder of African Capital Alliance. Previously, Mr. Kramer was Managing Partner at Arthur Andersen Nigeria, which he started in 1978, and he has helped many foreign companies enter Nigeria successfully. Mr. Kramer also serves as Chairman of Capital Alliance Nigeria Limited and SWIFT Networks Limited. He is a Non-Executive Director of Union Bank of Nigeria PLC. He serves as a Member of Africa Council at Emerging Markets Private Equity Association. He served on the Lagos Business School Advisory Board. He was formerly the Vice Chairman of the Nigerian Economic Summit Group. Mr. Kramer is a United States Certified Public Accountant and a Nigerian Chartered Accountant.

He holds an M.B.A. degree from Harvard Business School (1958) and an Accounting degree from Kansas University (1956).

Taimoor Labib – Non–Executive Director

Mr. Taimoor Labib has 20 years of direct private equity and mergers and acquisition experience. He began his career with Bear Stearns (New York) from 1998 to 2000 and The Carlyle Group (Washington, DC) from 2000 to 2003. Mr Labib currently serves regional Head of Middle East & North Africa Private Equity & Head of Global Private Equity Portfolio Management at Standard Chartered Private Equity. He holds a Bachelor of Science degree from Carnegie Mellon University (1997).

Mr Labib is a member of Standard Chartered Bank’s global principal finance management committee, all regional private equity investment committees, and the global exit committee.

Management Team – In addition to the Executive Directors listed above

Carlos Wanderley – Head, Retail Banking

Mr. Wanderley joined Union Bank in February 2015 to head its retail banking business, including the small, medium and enterprise businesses. Under his leadership, Union Bank’s retail business has seen significant growth on all relevant retail banking indicators across customers, products, and channels. The Bank is now recognised as the most improved retail bank in Nigeria and it continues to garner accolades from clients and the market at large. He gained his international reputation as a customer-centric business manager while working for Gillette and HSBC. Mr. Wanderley began at Gillette in Economics and Finance, later moving to Sales and Marketing and General Management. He later joined HSBC in a senior executive position in charge of their European and Latin American Retail operations. Carlos’ career has spanned more than thirty years, working in many different countries and cultures.

Carlos holds a bachelor’s degree in Economics from Federal University of Rio de Janeiro (1989), a post graduate degree in Human Resources and Finance from UCLA Anderson School of Management (1990) and an MBA from University of Sao Paulo (1995).

Joe Mbulu – Head, Transformation

Mr. Mbulu joined the Bank in August 2014, to direct and lead the transformation of Union Bank. He has over 25 years professional experience with world-class competences in financial management & analysis, organizational & business transformation, strategy/operational consulting and project/program management in the financial services, information, pharmaceutical, manufacturing and media industries. Prior to joining Union Bank, Mr. Mbulu was the Chief Operating Officer for the Domestic Bank business unit of Ecobank Transnational (“ETI”), where he coordinated strategy formulation and execution for the banking group’s retail, SME, local corporate and public sector businesses. Before ETI, Joe led Strategy & Business Transformation at former Bank PHB. He also served as the Vice President responsible for Business Transformation in the global Finance Organization at Nielsen in New York.

Joe holds an MBA from the Wharton School of Business, Pennsylvania (2001), an MSc in Finance from Lincoln University, Pennsylvania (1999), and BSc in Agricultural Economics from the University of Benin (1991).

Miyen Swomen – Head, Human Resources

Mr. Swomen was appointed Head of Human Resources for Union Bank in July 2014. He leads the transformation of the Human Resources function and the Bank’s workforce and is a member of the Executive Team. With over 25 years of experience, Mr. Swomen has led and championed several successful change management initiatives in national and multinational companies in large scale complex technology implementations and people transformation efforts. Having garnered significant consulting experience in Change Management, Human Capital and Resource Management as well as managing various Sales Campaigns and Marketing, working with May & Baker Nigeria PLC for 6 years before moving into Management Consulting with Accenture, he moved on to a career in banking, serving as Head of Human Resources for a few Nigerian Banks.

Mr. Swomen graduated from Ahmadu Bello University School of Pharmacy in 1991.

Lola Cardoso – Head of Group Corporate Strategy and Innovation

Mrs. Cardoso joined Union Bank in August 2013 to drive the Bank’s strategy, anchor its overall transformation and support execution bank wide. With over 18 years of experience providing strategic advice to corporate, start-up, and public sector organisations, she continues to drive Union Bank’s strategic

growth priorities and support critical efforts aligned to growth including sustainability and innovation. Prior to Union Bank, Mrs. Cardoso was a Director of Strategic Planning at A.T. Kearney, a global management consulting firm advising the world’s leading organizations on CEO-agenda issues focused on strategy, operations, and technology. She has over 10 years consulting experience focused on strategy, transformation and organizational change and spanning various industries including banking. She also worked at Dupont where she advised businesses and equity affiliates on financing strategies. She started her career as an investment banker in New York at Solomon Brothers and also worked at Lehman Brothers.

Lola obtained a Bachelor of Business Administration in Finance and Business Economics, Summa Cum Laude from Ohio University in 1997 and an MBA from the Ross School of Business, University of Michigan in 2001.

Chuka Emerole – Treasurer

Mr. Emerole joined Union Bank in 2014 as the Treasurer. Since joining the Bank, Mr. Emerole has led its treasury transformation specifically around people, process and technology. This transformation significantly improved Union Bank’s ranking on top traders by Financial Markets Dealers Quotations from 20th position in 2014 to top 10 in 2016. Prior to joining Union Bank, Mr. Emerole was the Regional Head of Asset and Liability Management West Africa at Standard Chartered Bank. He has over 17 years of experience in banking and treasury having worked at Standard Chartered and Kakawa Discount House Limited with focus on balance sheet management, liquidity, interest rate and credit risk management.

He holds an M.Sc in International Securities, Investment and Banking from the University of Reading, U.K (2004) and a B.Sc. in Economics from the University of Ibadan (1999).

Corporate Governance

Corporate Governance practices in Union Bank of Nigeria PLC are in compliance with the Central Bank of Nigeria Code of Corporate Governance of 2014, the Securities and Exchange Commission, Code of Corporate Governance of 2003, the Banks’ and Other Financial Institutions Act of 1991 (as amended) and other relevant statutes, which provide guidance for the governance of the Bank, compliance with regulatory requirements as well as, the core values upon which the Bank was founded. These codes and statutes are geared towards ensuring the accountability of the Board of Directors (“the Board”) and Management to the stakeholders of the Bank in particular and emphasize the need to meet and address the interests of a range of stakeholders, to promote the long term sustainability of the Bank.

Union Bank is committed to the best corporate governance practices and believes that adherence and commitment to high governance principles and standards is the panacea for effective control and management of the Bank. The Bank is committed to the highest ethical standards and transparency in the conduct of its business.

In compliance with the requirements of the CBN, the Bank undertakes periodic internal reviews of its compliance with defined corporate governance practices and submits reports on the Bank’s compliance status to the CBN. An annual Board appraisal review is also conducted by an independent consultant appointed by the Bank, whose report is submitted to the CBN and presented to shareholders at the AGM of the Bank, in compliance with the provision of the CBN Code of Corporate Governance.

Securities Trading Policy

The Bank has developed a Securities Trading Policy in line with the Codes of Corporate Governance of the CBN and SEC respectively, and Section 14 of the Amendment to the Listing Rules of The Nigerian Stock Exchange. The Policy restricts the Bank’s Directors, staff, shareholders, key management personnel, third party services provider or any other connected persons who have direct or indirect access to the Bank’s insider information from dealing in the Bank’s securities. It also prohibits the trading of the Bank’s securities during ‘close’ periods. The policy is designed to ensure that its compliance is monitored on an on-going basis.

Complaints Management Policy

The Bank’s Complaint Management Policy has been prepared pursuant to the Rules Relating to the Complaint’s Management Framework of the Nigerian Capital Markets issued by the SEC on 16 February

2015. The Policy applies strictly to the Bank’s shareholders and provides an avenue for them to make complaints regarding their shareholding and relationship within the Bank.

The Complaints Management Policy aims to promote and safeguard the interest of the Bank’s shareholders and investors, with its primary objective of ensuring that the activities of the Board and management are in the best interest of the Bank and its shareholders. The policy sets out the process and channels through which shareholders can submit their complaints, and the process for managing these complaints.

The Registrar and Company Secretary are jointly responsible for the implementation of this policy.

Remuneration Policy for Directors and Senior Management

The Bank’s Remuneration Policy for directors and senior management is geared towards attracting, retaining and motivating the best talent and enables the Bank achieve its financial, strategic and operational objectives. The policy sets out amongst others, the structure and components of the remuneration packages for Executive and Non-Executive Directors, and ensures that the remuneration packages are in compliance with the CBN and SEC Code of Corporate Governance.

Governance Structure

The Bank’s governance bodies, composition and their respective meeting attendance schedules are captured below:

The Board of Directors

The Board of Directors oversees the management of the Bank, and comprises a Non-Executive Chairman, Nine Non-Executive Directors, the Chief Executive Officer and six Executive Directors who are listed below:

S/N NAME CC FGP ESC RMC RNC AC 1 Cyril Odu 2 Emeka Emuwa M M M M 3 Oyinkansade Adewale M M 4 Kandolo Kasongo M M 5 Emeka Okonkwo M M 6 Adekunle Sonola M M 7 Nath Ude M M 8 Richard Kramer C M 9 John C. Botts M M M C 10 Richard Burrett C M M M 11 Ian Clyne M C M M 12 Beatrice A Hamza Bassey M M M M 13 Obafunke Alade-Adeyefa M M C 14 Furera Isma Jumare C M M 15 Taimoor Labib

CC – Board Credit Committee FGP – Board Finance & General Purposes Committee ESC – Board Establishment and Services Committee RMC – Board Risk Management Committee RNC – Board Remuneration Committee AC – Board Audit Committee C – Board Committee Chairman M – Board Committee Member

The responsibility of each Board Committee is set out below:

Committee Responsibility Board Credit • Consider and approve credits and other credit related matters within its Committee set limit • Review and recommend credits and other credit related matters above its limit to the Board for consideration and approval • Review the credit portfolio • Serve as a catalyst for the Bank’s credit policy changes from the Credit Committee to the Board Board Finance & • Review and report to the Board on the Bank’s financial projections, capital General Purposes and operating budgets, progress of key initiatives, including actual Committee financial results against targets and projections • Review and recommend to the Board, the Bank’s capital structure, including, but not limited to, allotment of new capital, debt limits and any changes to the existing capital structure • Review and recommend to the Board the Bank’s annual plan for the allocation of capital and material changes during the course of the year • Formulate guidelines from time to time on cost control and reduction, consistent with maximum efficiency, and make appropriate recommendations to the Board • Review major expense lines, as warranted, approve expenditures within the Committee’s approved limits and review and recommend for Board approval any expenditures beyond the Committee’s approved limits • Review and report to the Board on the Transformation programme against goals, including timing, budget, quality of delivery, and tradeoffs between transformation plans and business as-usual (if required) • Review and recommend for Board approval, the Bank’s Transformation budget and any associated expenditures beyond that delegated to management • Review and provide feedback to the Board on the development of the Bank’s strategic planning process and performance objectives to ensure the achievement of the financial targets expected by shareholders • Review and report to the Board on the effectiveness of the Bank’s strategic planning and implementation monitoring process • Review and provide feedback to the Board on high-impact initiatives not otherwise managed by another committee that may have a material impact on the Bank’s finances, regulatory relationships, customers and/or infrastructure • Review and recommend for Board approval any transactions associated with high-impact initiatives and any associated expenditures beyond that delegated to management • Review and recommend for Board approval any change to the delegation of authorities to management and management committees on financial matters • Review and recommend for Board approval the Bank’s dividend policy, including amount, nature and timing Board • Consider and approve appointments, promotions and discipline of Establishment and Principal Managers and above; Services • Review and recommend appointments, promotions and discipline of Committee Assistant General Managers and above, to the Board for consideration and approval. • Consider and recommend compensation increments for Principal Managers and above to the Board for consideration and approval. • Consider and review staff compensation, welfare and industrial relations matters and make appropriate recommendations to the Board from time to time. • Articulate and recommend strategic and succession plans for the Bank, to the Board from time to time.

• Review and report to the Board, annually, on the broad key performance indicators set by executive management for staff groups below the executive management level (“Staff”) to achieve that year’s business and financial goals. • Review and report to the Board, on the annual performance evaluations of Staff conducted by management for the prior year’s performance and the overall outcome of the annual performance process. • Review and report to the Board annually, the overall training policy and program for Staff and any changes as they arise to achieve business and financial goals. • Review and recommend to the Board approval of the remuneration policy, annual quantum, structure, and distribution of compensation (including base, overall annual bonus pool and awards, and benefits in kind) for Staff and changes thereto. • Review and report to the Board annually, the total cash compensation package for Staff to ensure it will attract, retain and motivate key talent who add value to the Bank based on individual and team contributions. • Review and recommend for approval of the Board, the severance policy for Staff. • Review and recommend for Board approval, the Bank’s organisational structure, key human capital policies and practices, including those affecting compensation, welfare, performance management, career management and transfer to ensure the optimal mix of talent. • Review and recommend for Board approval, the Bank’s staff optimization plan and strategy. • Review and recommend for Board approval, revision of salaries and service conditions for Staff. • Review and approve, as needed, the recruitment, promotions and severance of senior officers on Principal Manager grade. • Review and recommend for Board approval, as needed, the recruitment, promotions and severance of senior officers on Assistant General Manager grade and above. • Review and recommend for Board approval, the Bank’s Succession Plan for senior officers on Assistant General Manager grade and above and any proposed amendments. • Review and recommend for Board approval, any policies not otherwise contemplated herein relating to Staff and, as necessary and appropriate, Support Staff. • Review and recommend for Board approval, the Bank’s Culture Program, including mission statements, core values, and the incentives to align Staff towards the Bank’s near and medium term strategic objectives. • Review and report to the Board annually or as needed, the progress of the Culture Program and its effectiveness in driving the desired Staff behaviour and performance. • Review and recommend for Board approval annually or as needed, the overall strategies with Staff Unions and relationships with the Bank’s Staff. • Review and advise the Board annually or as needed, the strategy for and engagement of service providers of Support Staff, including the overall cost, performance and effectiveness of outsource firms in delivering cost effective, high quality service to the Bank’s customers. • Review and report to the Board annually or as needed, the progress of outsourcing solutions and their effectiveness in delivering against the Banks’ Transformation strategy. Board Risk • Develop an organization-wide risk management framework Management • Exercise a board oversight function on all risk related issues Committee • Ensure compliance with the bank’s organization-wide policies and framework covering all risk types (credit, market, assets and liabilities, strategic, legal, human resources etc) • Ensure compliance with all statutory and regulatory requirements • Consider departmental reports and advise management on risks Board • Consider and recommend the appointment of Executive Management and Remuneration Non-Executive Directors for Board consideration and approval Committee

• Consider, approve and recommend the performance parameters for Executive Management • Consider and recommend compensation for Executives and Executive Management • Consider and review the performance of the Chief Executive Officer Board Audit • Review the Bank’s accounting and financial reporting functions Committee • Review the Bank’s accounting system • Review the Bank’s internal control structures • Review the Bank’s internal control systems and processes • Recommend the appointment, remuneration and removal of external auditors to the Board • Review and recommend the audited financial statements to the Board for approval

USE OF PROCEEDS Unless otherwise stated in the applicable Supplement, the net proceeds from each issue of the Bonds will be used for general banking purposes including but not limited to growing the Issuer’s asset base and shoring up the Bank’s existing capital base and for such other specific purposes as may be determined from time to time. The applicable Supplement for each Tranche or Series under the Programme will specify details of the use of proceeds of the particular Tranche or Series.

EXTRACT FROM THE ISSUER’S RATING REPORT

REPORTING ACCOUNTANT’S REPORT

1. CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Restated Dec-17 Dec-16 Dec-15 N'm N'm N'm

Interest and similar income 124,549 99,721 90,902 Interest expense and similar charges (57,880) (34,682) (35,219) Net interest income before impairments of advances 66,669 65,039 55,683 Loan impairment charges (25,609) (17,879) (9,948) Net interest income after impairment charges 41,060 47,160 45,735 Net Fee and commission income 10,207 10,577 7,697 Net gains on financial instruments classified as held for trading 9,129 5,089 5,231 Derivative income 362 2,572 1,820 Foreign exchange income 1,619 2,024 124 Other Operating income 17,978 9,623 11,295 Operating Income 80,355 77,045 71,902 Net impairment write-back on other assets 292 693 704 Net operating income after impairment write-back on other assets 80,647 77,738 72,606 Employee benefit expenses (29,557) (31,234) (30,041) General and administrative expenses (29,533) (25,860) (23,823) Depreciation (4,572) (3,806) (3,214) Amortisation (1,466) (1,100) (772) Profit before income tax 15,519 15,738 14,756 Income tax (911) (347) (552) Profit for the year 14,608 15,391 14,204

Other comprehensive income: Items that will never be reclassified to profit or loss Re-measurement of defined benefit liabilities - 305 - Items that may be subsequently reclassified to profit or loss Unrealised net gains arising during the year before tax 7,862 1,939 7,400 Foreign currency translation differences for foreign operations 2,144 7,746 982 Other comprehensive income for the year, net of tax 10,006 9,990 8382 Total comprehensive income for the year 24,614 25,381 22,683

2. CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Restated 31 Dec. 2017 31 Dec. 2016 31 Dec. 2015 Assets N'm N'm N'm

Cash and balances with the Central bank 274,792 161,841 141,798 Cash and balances with other Banks 66,961 24,139 34,189 Loans and advances to banks 132,200 105,409 38,073 Loans and advances to customers 517,103 507,190 366,721 Investment in equity accounted investee - - 24 Financial assets held for trading 20,076 8,323 - Derivative assets held for risk management 1,297 2,747 1,820 Investment securities 239,654 234,909 295,670 Trading properties 1,153 2,309 3,177 Investment properties 4,951 4,347 4,546 Property and equipment 55,986 52,800 52,611 Intangible assets 4,344 3,374 3,749 Deferred tax assets 95,875 95,910 95,883 Other assets 40,399 47,344 11,073 Defined benefit assets 352 1,643 - Assets classified as held for sale 397 397 397 Total assets 1,455,540 1,252,682 1,049,731

Liabilities

Derivative liabilities held for risk management 972 13 - Deposits from banks 100,131 90,266 44,091 Deposits from customers 802,384 658,444 570,639 Current income tax liabilities 524 465 382 Deferred tax liabilities 259 101 - Other liabilities 111,461 141,404 107,533 Employee benefit obligations 857 805 4,267 Other borrowed funds 93,211 89,514 76,059 Total liabilities 1,109,799 981,012 802,971

Equity Share capital 14,561 8,468 8,468 Share premium 187,091 391,641 391,641 Retained earnings (14,384) (244,183) (242,063) Other components of equity 152,642 110,633 83,377 Non-controlling interest 5,831 5,111 5,337 Total equity 345,741 271,670 246,760 Total equity and liabilities 1,455,540 1,252,682 1,049,731

3. CONSOLIDATED STATEMENT OF CASH FLOWS

31 Dec-2017 31 Dec-2016 31 Dec-2015 N'm N'm N'm

Cash flows from operating activities Profit before income tax 15,519 15,738 14,862 Adjustments: Loan impairment charges 19,663 16,582 9,948 Net reversal of impairment on other assets (292) (693) (504) Write off: intangible assets and property and equipment 136 217 - Depreciation and amortisation charges 6,038 4,906 3,977 Interest paid on borrowings 11,905 9,929 8,683 Dividend income from equity investment (1,033) (765) (686) Revaluation gains on investment properties (200) - - Gain on disposal of trading properties (238) (90) (728) Gain on disposal of equity investment and subsidiaries - (665) 139 Gain on disposal of property and equipment (1,769) (2,562) (1,660) Contributions to defined contribution plans 726 722 644 Increase in liability for defined benefit plans 745 464 4,347 51,200 43,783 39,022 Changes in: Cash and balances with the Central bank (restricted cash) (96,339) (27,341) (14,237) Loans and advances to customers (29,576) (157,051) (63,872) Financial assets held for trading (11,753) (8,323) 745 Other assets 6,195 (4,704) (3,176) Derivative assets held for risk management 1,450 (927) (1,813) Derivative liabilities held for risk management 959 13 (7) Deposits from banks 9,865 46,175 (17,799) Deposits from customers 143,940 87,805 43,022 Other liabilities (28,355) 29,588 6,608 47,586 9,018 (11,507) Payment from defined contribution plan (754) (722) (623) Payment from defined benefit plan (669) (1,343) (7,626) Income taxes paid (659) (269) (1,051) Net cash generated from/(used in) operating activities 45,504 6,684 (20,807)

Cash flows from investing activities Net (Acquisition)/proceeds of investments securities 3,924 35,653 (7,543) Net (Acquisition)/proceeds of investments & trading properties 1,263 1,157 (519) Purchase of Property and equipment and intangible assets (12,572) (9,791) (8,755) Proceeds on disposal of subsidiaries - 3,006 3,596 Dividend income on equity investments 1,033 765 686 Proceeds from sale of property and equipment 4,169 5,271 3,438 Net cash used in investing activities (2,183) 36,062 (9,097)

Cash flows from financing activities Proceed from issue of shares 49,164 - - Proceed/(repayment) of borrowings (8,208) 3,526 (10,759) Net cash generated from financing activities 40,956 3,526 (10,759)

Cash and cash equivalents at the beginning of the year 136,194 82,252 121,960 Net increase/(decrease) in cash and cash equivalents 84,277 46,272 (40,663) Effect of exchange rate fluctuations on cash and cash equivalents 2,106 7,670 955 Cash and cash equivalents at the end of the year 222,577 136,194 82,252

STATUTORY AND GENERAL INFORMATION

1. INCORPORATION AND SHARE CAPITAL HISTORY

At incorporation on 30 May 1969, the authorised share capital of Union Bank was N10,000,000 divided into 10,000,000 ordinary shares of N1.00 each. At present, authorised share capital is N17,500,000,000.00 divided into 35,000,000,000.00 ordinary shares of N0.50 each. The issued and fully paid up share capital is N32,760,846,886.00 ordinary shares valued at N0.50 each. The following changes have taken place in the Bank‘s issued capital since incorporation:

YEAR AUTHORIZED ISSUED AND PAID-UP CONSIDERATION INCREASE/ CUMULATIVE INCREASE/ CUMULATIVE DECREASE DECREASE 1969 - £10,000,000 - - 1969 - £10,000,000 - £5,000,000 Assets 1969 - £10,000,000 £5,000,000 £10,000,000 Assets 1969 £10,000,000 £20,000,000 - £10,000,000 1970 - £20,000,000 £1,000,000 £11,000,000 Assets 1971 - £20,000,000 - N11,000,000 Conversion of Currency (2 ordinary shares of N1.00 each for 1 ordinary share of £1) 1971 - N20,000,000 N1,000,000 N12,000,000 Cash 1975 - N20,000,000 N2,400,000 N14,400,000 Bonus (1 for 5) 1976 - N20,000,000 N2,880,000 N17,280,000 Bonus (1 for 5) 1977 N10,000,000 N30,000,000 N4,320,000 N21,600,000 Bonus (1 for 4) 1978 N20,000,000 N50,000,000 N8,640,000 N30,240,000 Bonus (2 for 5) 1979 - N50,000,000 N6,048,000 N36,288,000 Bonus (1 for 5) 1982 N50,000,000 N100,000,000 N18,144,000 N54,432,000 Bonus (1 for 2) 1987 - N100,000,000 N9,072,000 N63,504,000 Bonus (1 for 6) 1989 - N100,000,000 - N63,504,000 Stock Split (N1 to N0.25) 1991 N100,000,000 N200,000,000 N15,876,000 N79,380,000 Bonus (1 for 4) 1992 N50,000,000 N250,000,000 - N79,380,000 1994 N250,000,000 N500,000,000 N79,380,000 N158,760,000 Bonus (1 for 1) 1995 - N500,000,000 N39,690,000 N198,450,000 Bonus (1:4) 1996 N500,000,000 - N198,450,000 Stock Consolidation (N0.25 to N0.50) 1996 - N500,000,000 N198,450,000 N396,900,000 Bonus (1:1) 1998 N500,000,000 N1,000,000,000 N132,300,000 N529,200,000 Bonus (1:3) 1998 - N1,000,000,000 N100,000,000 N629,200,000 Cash/Public Offer (200 million ordinary shares of N0.50) 1999 - N1,000,000,000 - N629,200,000 2000 - N1,000,000,000 - N629,200,000 2001 N2,000,000,000 N3,000,000,000 N209,750,000 N838,950,000 Bonus (1:3) 2002 - N3,000,000,000 N419,475,000 N1,258,425,000 Rights Issue (1 for 2) 2003 - N3,000,000,000 N419,475,000 N1,677,900,000 Bonus (1:3) 2004 N2,000,000,000 N5,000,000,000 N559,300,000 N2,237,200,000 Bonus (1:3) 2005 - N5,000,000,000 N745,715,500 N2,982,915,500 Bonus (1:3) 2006 N2,500,000,000 N7,500,000,000 N313,490,400 N3,296,405,900 Bonus (1:10) 2006 - N7,500,000,000 N1,376,507,661 N4,672,913,561 Public Offer/Rights Issue 2006 - N7,500,000,000 N152,030,090 N4,824,943,651 Bank Acquisition 2007 N2,500,000,000 N10,000,000,000 - N4,824,943,651 2007 - N10,000,000,000 N965,159,545 N5,790,103,196 Bonus (1:5) 2008 N5,000,000,000 N15,000,000,000 N965,000,000 N6,755,103,196 Bonus (1:6) 2009 - N15,000,000,000 - N6,755,103,196

2010 - N15,000,000,000 - N6,755,103,196 2011 (N5,488,437,500) N9,511,562,500 N1,705,525,249 N8,467,903,235 Capital Reorganization & Reduction 2012 - N9,511,562,500 - N8,467,903,235 2013 - N9,511,562,500 - N8,467,903,235 2014 - N9,511,562,500 - N8,467,903,235 2015 - N9,511,562,500 - N8,467,903,235 2016 N7,988,437,500 N17,500,000,000 - - Share Capital Increase July - N17,500,000,000 N25,649,661 N8,493,552,896 Allotment of LTTIP 2017 Shares Dec. - N17,500,000,000 N6,066,823,497.50 N14,560,376,394 Rights Issue 2017

2. SHAREHOLDING STRUCTURE

As at 31 December 2017, Union Bank’s issued share capital of 29,120,752,788 Ordinary Shares of 50 kobo each was beneficially held as follows:

Shareholder % Union Global Partners Limited 65.31%

Atlas Mara Limited 24.01%

As at 31 December 2017, except as stated above, no other shareholder held more than 5% of the issued share capital of the Bank.

3. DIRECTORS’ BENEFICIAL INTERESTS

The interests of the Directors in the issued share capital of the Bank as recorded in the Register of Directors’ Interests or as notified by them for the purpose of section 275(1) of CAMA as at 31 December 2017 are as follows:

Director Direct Indirect % Shareholding Shareholding Cyril Odu 2,661 - 2,661 Emeka Emuwa 53,354,517 12,069,966 65,424,483 Oyinkansade Adewale 2,160,602 2,160,602 Kandolo Kasongo 5,008,854 - 5,008,854 Emeka Okonkwo 5,641,551 - 5,641,551 Adekunle Sonola 5,396,673 - 5,396,673 Nath Ude - - - Richard Kramer (OFR) - - - John C. Botts - - - Richard Burrett - - - Ian Clyne - - - Beatrice A. Hamza Bassey - - - Obafunke Alade-Adeyefa - - - Furera Isma Jumare - - - Taimoor Labib - - -

4. INDEBTEDNESS

As at 31 December 2017, the Bank had outstanding indebtedness of N=89.5 billion, which includes the following: Facility Type Amount (N’million) Commercial Agriculture Credit Scheme Unsecured facility 9,240 Bank of Industry Intervention credit facility 6,286 Foreign currency 73,988 Other borrowings denominated facilities

5. OFF BALANCE SHEET ITEMS

As at December 31, 2017, there were contingent liabilities in respect of litigation against the Bank and other regulatory reviews amounting to N=2.98 billion (2016 - N=3.10 billion). In the opinion of the Directors, the liabilities, if any, are not likely to be material

6. SUBSIDIARIES

As at the date of this Prospectus, the Issuer had two subsidiaries:

Subsidiaries Address % Shareholding UBN Property Company Plc. Stallion Plaza (3rd floor), 36 Marina Lagos 39.01% Union Bank UK Plc. 1 King's Arms Yard, London 100.00%

7. CLAIMS AND LITIGATION

As at January 2018, a total of 837 cases were instituted by, and against, the Issuer.

The Issuer is a claimant in 45 of those 837 cases and a defendant in the others. The total value of the Issuer’s claim in these cases is N10,914,958,277.40. In the 792 cases in which the Issuer is a defendant, the total claims against the Issuer are set out below:

i. claims in Naira – N268,515,670,723.89; ii. claims in Dollars – $8,161,313.21; iii. claims in Pounds – £3,968,247,942.89; and iv. claims in Swiss Francs – CHF5,701,557.50.

Of these 792 cases, the Issuer has counterclaimed for a total sum of N16,437,120,571.50 and $10,103,939.55 in 176 of the cases in which it is a defendant.

The directors of the Issuer hold the view that the Issuer stands a chance of successfully challenging a substantial number of these claims and have, therefore, made a provision for the sum of N2,980,000,000.00 in its audited financial statements for the year ending 31st December, 2017 as the contingent liability that may arise in connection with the claims brought against it and the directors deemed this level of contingency sufficient to cover any successful claim which may be made against the Issuer.

8. EXTRACTS FROM THE MEMORANDUM AND ARTICLES OF ASSOCIATION

Below are relevant extracts from the Issuer’s Memorandum and Articles of Association: Objects Clause 3 of the Memorandum of Association “The objects for which the Company is established are: (M) – to borrow or raise money in such manner as the Company shall think fit, and in particular by issue of debentures, or debenture stock (perpetual or otherwise) and to secure the repayment of any money borrowed, raised or owing, by mortgage, charge or lien upon the whole or any part of the Company’s property or assets (whether present or future), including its uncalled capital and also by

similar mortgage, charge or lien to secure and guarantee the performance by the Company of any obligation or liability it may undertake. (S) – to underwrite or guarantee the subscription of, or issue or provide for the issue of any stocks, funds, shares or securities and to undertake any duty in relation to the register of transfers, the issue of certificates or otherwise and to undertake any kind of agency business.”

Articles of Association

Article 57 - Borrowing Powers of the Board of Directors

“The Directors may exercise all the powers of the Company to borrow money, and to mortgage or charge its undertaking, property and uncalled capital, or any part thereof, and to issue debentures, debenture stock, and other securities whether outright or as security for any debt, liability or obligation of the Company or of any third party. Provided that the amount for the time being remaining undischarged of moneys borrowed or secured by the Company and all its subsidiaries (other than interest and apart from temporary loans obtained from bankers and moneys received on current, savings and deposit accounts and otherwise in the ordinary course of business) shall not at any time without the previous sanction of the Company in general meeting exceed six times the aggregate of the amount for the time being paid up on the share capital of the Company and of its reserve but nevertheless no lender or other persons dealing with the Company shall be concerned to see or enquire whether this limit is observed.”

9. DECLARATIONS

Except as otherwise disclosed in this Prospectus:

1 No share of the Issuer is under option or agreed conditionally or unconditionally to be put under option; 2 No commissions, brokerages or other special terms have been granted by the Issuer to any person in connection with the Debt Issuance Programme or sale of any securities of the Issuer; 3 Save as disclosed in this Prospectus, the directors of the Issuer have not been informed of any holding representing 5% or more of the issued share capital of the Issuer; 4 There are no founders’, management or deferred shares or any options outstanding; 5 There are no material service agreements between the Issuer or any of its respective Directors and employees other than in the ordinary course of business; 6 There are no long-term service agreements between the Issuer or any of its respective Directors and employees other than in the ordinary course of business; 7 No Director of the Issuer has had any interest, direct or indirect, in any property purchased or proposed to be purchased by the Issuer in the five years prior to the date of this Prospectus; 8 No prosecution has commenced against the Issuer or any of its respective subsidiaries in respect of any breach of any securities or CAMA; 9 No action has been taken against the Issuer by The NSE or FMDQ OTC in respect of any breach of the listing requirements of The NSE or FMDQ OTC respectively. It is further declared that as at 07 September 2018:

10 None of the Directors is under any bankruptcy or insolvency proceedings in any court of law; 11 None of the Directors has been convicted in any criminal proceeding; 12 None of the Directors is subject of any order, judgment or ruling of any court of competent jurisdiction or regulatory body relating to fraud or dishonesty.

10. COSTS AND EXPENSES

The costs and expenses of and incidental to the issuance of Bonds under the Programme, including fees payable to the regulatory authorities, brokerage commission, professional parties, printing and distribution expenses, would be determined at each issuance and will not exceed the maximum amount stipulated by the regulatory authorities. In addition, these costs and expenses shall be borne by Union Bank and will be specified in the applicable Supplement.

11. MATERIAL CONTRACTS

The following agreement has been entered into and is considered material to this Programme:

i. Programme Trust Deed between Union Bank, ARM Trustees Limited and UTL Trust Management Services Limited dated 07 September 2018; ii. US$75 million Term Loan Facility Agreement dated 28th July, 2016 between African Export- Import Bank (“Afrexim”) and the Company; iii. Afrexim’s consent letter dated 31st May, 2018; and iv. Vending Agreement between the Issuer and Issuing Houses.

Other material contracts in respect of any issuance of Bonds under the Programme will be disclosed in the applicable Pricing Supplement in respect of that Series of Bonds.

12. RELATIONSHIPS BETWEEN THE ISSUER AND ITS ADVISERS

Standard Chartered Bank, via its private equity arm, is currently a shareholder of Union Bank with a 1.6% shareholding.

Union Bank previously owned a 100% equity stake in Union Capital Markets Limited. The Bank completed the divestment of its equity stake in Union Capital Markets Limited in November 2014.

13. MERGERS AND TAKEOVERS

As at the date of this Prospectus, Union Bank is not aware of any attempt by any investor to acquire a majority shareholding in the Bank or of any attempt or intention by the Bank to acquire a majority shareholding in any other entity.

14. CONSENTS

The following have given and not withdrawn their written consents to the issue of this Shelf Document with their names and reports (where applicable) included in the form and context in which they appear:

Directors of the Bank: Cyril Odu Emeka Emuwa Oyinkansade Adewale Kandolo Kasongo Emeka Okonkwo Adekunle Sonola Nath Ude Richard Kramer (OFR) John C. Botts Richard Burrett Ian Clyne Beatrice A. Hamza Bassey Obafunke Alade-Adeyefa Furera Isma Jumare Taimoor Labib

Company Secretary: Somuyiwa Adedeji Sonubi Lead Issuing House: Stanbic IBTC Capital Limited Joint Issuing Houses: Barclays Nigeria Securities Limited

Standard Chartered Capital & Advisory Nigeria Limited Union Capital Markets Limited Issuer’s Counsel: Aluko & Oyebode Transaction Counsel: Udo Udoma & Belo-Osagie

Trustee’s Counsel: Banwo & Ighodalo

Trustees: ARM Trustees Limited UTL Trust Management Services Limited

Rating Agencies: Agusto & Co. and Global Credit Rating Co.

Reporting Accountant: PricewaterhouseCoopers

Receiving Banks: Stanbic IBTC Bank Plc Zenith Bank Plc

15. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents can be inspected at the offices of Stanbic IBTC Capital Limited, Barclays Securities Nigeria Limited, Standard Chartered Capital & Advisory Nigeria Limited and Union Capital Markets Limited at I.B.T.C. Place, Walter Carrington Crescent, Victoria Island; 38A Glover Road, Ikoyi; and 7 Fatai Durosinmi Etti Crescent, Off Ligali Ayorinde Street, Victoria Island, Lagos respectively between 8:00a.m and 5:00p.m on Business days, for the validity of the Programme:

i. The Certificate of Incorporation of the Issuer; ii. The Memorandum and Articles of Association of the Issuer; iii. A copy of the resolution dated 29 January 2018 passed at the meeting of the Board of Directors of Union Bank of Nigeria PLC, approving the Programme signed by a Director and the Company Secretary; iv. This Prospectus dated 07 September issued in respect of the ₦100,000,000,000 Debt Issuance Programme; v. The Programme Trust Deed; vi. The audited financial statements of the Issuer for the three years ended 31 December 2017; vii. The Report by PricewaterhouseCoopers on the audited financial information of the Issuer for each of the three years ended 31 December 2017; viii. The schedule of the claims and litigation referred to above and the Solicitors’ opinion thereon; ix. The material contracts referred to on page 96 of this Prospectus; x. The written consents referred to on page 96 of this Prospectus; and xi. The Issuer’s Ratings Report.

FORM OF PRICING SUPPLEMENT Set out below is the form of Pricing Supplement which will be prepared by the Issuer for each Series of Bonds issued under the Programme

UNION BANK OF NIGERIA PLC RC 6262

OFFER FOR SUBSCRIPTION OF [∙] [∙] YEAR [∙] % [●] DUE [∙] UNDER THE ₦100,000,000,000 UNION BANK OF NIGERIA PLC DEBT ISSUANCE PROGRAMME ISSUE PRICE: N [•] PER UNIT PAYABLE IN FULL ON APPLICATION

APPLICATION LIST OPENS: [•]

APPLICATION LIST CLOSES: [•]

This Pricing Supplement is prepared for the purpose of Rule 279(3) (6) & (7) of the Rules and Regulation of the Securities & Exchange Commission (the “Commission” or “SEC”) in connection with the ₦100,000,000,000.00 Debt Issuance Programme established by Union Bank of Nigeria PLC (the “Issuer”). This Pricing Supplement is supplemental to, and should be read in conjunction with, the Prospectus dated [•] and any other supplements to the Prospectus to be issued by the Issuer. Terms defined in the Prospectus have the same meaning when used in this Pricing Supplement.

To the extent that there is any conflict or inconsistency between the contents of this Pricing Supplement and the Prospectus, the provisions of this Pricing Supplement shall prevail. This Pricing Supplement may be used to offer and sell the Bonds only if accompanied by the Prospectus. Copies of the Prospectus can be obtained free of charge from the offices of the Commission, the Issuer and the Issuing Houses and can also be downloaded from the respective websites of the Commission and the Issuer, throughout its validity period.

The registration of the Prospectus and this Pricing Supplement shall not be taken to indicate that the Commission endorses or recommends the securities or assumes responsibility for the correctness of any statements made or opinions or reports expressed in the Prospectus or this Pricing Supplement. No securities will be allotted or issued on the basis of the Prospectus read together with this Pricing Supplement later than three years after the date of the issue of the Prospectus.

This Pricing Supplement contains particulars in compliance with the requirements of the Commission for the purpose of giving information with regard to the Securities being issued hereunder (the “Series [●] Bonds” or “Bonds”). An application has been made to The NSE for admission of the Bonds to its exchange. The Bonds now being issued will upon admission to the exchange qualify as a security in which Trustees may invest under the Trustee Investments Act (Cap T22) Laws of the Federation of Nigeria, 2004.

The Issuer accepts full responsibility for the accuracy of the information contained in this Pricing Supplement. The Issuer declares that having taken reasonable care to ensure that such is the case, the information contained in this Pricing Supplement is, to the best of its knowledge (having made all reasonable enquiry), in accordance with the facts and does not omit anything likely to affect the import of such information and that save as disclosed herein, no other significant new factor, material mistake or inaccuracy relating to the information included in the Prospectus has arisen or has been noted, as the case may be, since the publication of the Prospectus. Furthermore, the material facts contained herein are true and accurate in all material respects and the Issuer confirms that, having made all reasonable enquiries, to the best of its knowledge and belief, there are no material facts, the omission of which would make any statement contained herein misleading or untrue.

This Pricing Supplement is dated [•] 2018

Final terms of the Series [●] Bond

1. Issuer: Union Bank of Nigeria Plc

2. Description of the Bonds: [●]

3. Series Number: [●]

4 Specified Currency: [●]

5. Aggregate Nominal Amount: ₦[●]

6. Issue Price: [●]

7 Net proceeds ₦[●]

8. Denomination: [●]

9. Issue Date: [●]

[Coupon shall accrue from the Issue 10. Coupon Commencement Date date]

11. Maturity Date: [●]

12. Principal Moratorium: [●]

13. Coupon Basis: [●]

14. Coupon: [●]% p.a.

15. Redemption/Payment Basis: [●]

16. Status: [●]

17. Payment Undertaking: [●]

18. Negative Pledge [●]

19. Listing(s): [●]

20. Method of Distribution: [●]

21. Offer Period: [●]

Provisions relating to coupon (if any) payable

22. Fixed Rate Bond Provisions

i. Coupon Payment Date(s)/Payment Dates: [●]

ii. Coupon Amount(s): [●]

iii. Day Count Fraction: [●]

iv. Business Day Convention: [Modified Following: Where a Coupon Payment Date falls on a non-Business Day, such payment shall be postponed to the

next day which is a Business Day provided that if such a Business Day falls into the next calendar month, such Coupon Payment Date shall be brought forward to the immediately preceding Business Day].

v. Other terms relating to method of [●] calculating Coupon for Fixed Rate Bonds:

vi. Zero Coupon Note Provisions: [●](Delete if not applicable)

vii. Floating Rate Note Provision [●](Delete if not applicable)

Provisions relating to redemption

23. Optional Early Redemption

(ii) Call Option: [Applicable/Not Applicable]

(iii) Put Option: [Applicable/Not Applicable]

24. Scheduled Amortisation: [Applicable/Not Applicable]

25. Redemption Amount(s): [●]

26. Scheduled Redemption Dates: [●]

General provisions applicable to the Bonds

27. Form of Bonds: Dematerialised

a) : [●]

b) Registrar: First Registrars and Investor Services Limited

28. Trustees: ARM Trustees Limited

UTL Trust Management Services Limited

29. Record Date: [●]

30. Other terms or special conditions: [●]

31. Payment Agent [●]

Distribution, clearing and settlement provisions

32. Method of Distribution: [●]

33. Underwriting: [●]

100

34. Delivery [●]

35. Clearing System: Central Securities Clearing System PLC

36. Rating: a. Issuer: [●] [●] b. Issue:

An issue rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency.

General

37. Taxation: See “Tax Considerations” on page [60] of the Prospectus dated [●].

38. Risk Factors: See Risk Factors on page [43] - [59] of the Prospectus dated [●].

39. Governing Law: The Bonds will be governed by and construed in accordance with the laws of the Federal Republic of Nigeria.

Appendices

40. Appendices: [List and attach appendices if applicable]

Use of proceeds

[Insert details of use of proceeds]

Material adverse change statement

Except as disclosed in this document and in the Prospectus dated 07 September 2018, there has been no significant change in the financial or trading position of the Issuer since [Insert date of last audited accounts or interim accounts (if later)] and no material adverse change in the financial position or prospects of the Issuer since [insert date of last published annual accounts].

101