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Union Bank of Jamaica Union Bank of Jamaica, the country's newest commercial bank, is the island's third largest bank with total assets of $35.2B, a loan portfolio of $2.1B and deposit liabilities of $15.8B as at December 31, 1999. Union Bank is the result of a merger of the business of 4 FINSAC controlled commercial banks and their three allied merchant banks, all seven of which sought Government intervention when faced with insolvency. These are:
The merger process began with the consolidations of the business and operations of Island Victoria Bank, Eagle Commercial Bank and Workers Bank, the ownership structures of which allowed unilateral action by FINSAC. In order to incorporate Citizens Bank into the process, the Minister of Finance approved a scheme arrangement and issued a Vesting Order, merging the assets and business of the four banks under the Citizens Bank license, as provided for under the Banking Act. The final step came at Citizens Bank's Annual General Meeting on June 29, 1999, when shareholders voted to change the name of Citizens Bank to Union Bank of Jamaica and authorised the injection of over $2 billion of new capital by Finsac into the bank. One of the most compelling reasons for the merger was the need to return the financial sector to a size sustainable by the economy. The growth spurt of the early eighties resulted in a proliferation of both commercial banks and merchant banks. Beyond this, the merger would facilitate: · Opportunities for significant cost reduction · The use of common technology, which is vital in view of the Y2K compliance requirements for the new millennium and the related replacement costs the banks would have to face individually. · The creation of the critical mass and efficiencies to make the institutions attractive enough to interest potential purchasers and shareholders · Improvement in the solvency position of the new bank with the merging of the assets of all four banks. Information Technology ConversionUnion Bank of Jamaica was converted to one common platform - Finware (core retail banking application) in mid-September 1999. The Information Technology Unit at FINSAC was able to convert 4 different systems within a 9 month period. Based on precedence, a project of this magnitude would have taken at least twenty-four 24 months to complete. The merger of the 4 banks saw 41 branches consolidated into 24 branches. Union Bank is represented islandwide in most major towns. This new network will offer: · Increased operating efficiency and effectiveness · Increase marketing effectiveness · Maximising market presence · Maximising customer retention The ultimate goal is to return Union Bank of Jamaica to private hands through divestment to the most suitable buyer. Here, as in all FINSAC holdings, the documented divestment policies and criteria will be observed.
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