United Bank for Africa Plc has launched a capital-raising initiative through a rights issue, where 6,839,884,274 new ordinary shares of 50 kobo each are available at N35 per share.
This initiative, which began on Friday, is aimed at raising N239.4 billion, in response to the Central Bank of Nigeria’s newly revised minimum capital requirements for banks.
This rights issue offers existing shareholders an opportunity to purchase one new share for every five shares they currently hold, with the eligibility cut-off set for November 5, 2024.
The CBN had earlier in the year, around late March, updated the capital requirement framework for banks, spurring UBA’s action to fortify its financial base.
In a formal letter to shareholders, UBA’s Group Chairman, Tony Elumelu, expressed the significance of this rights issue in the context of UBA’s wider capital raising agenda.
Following shareholder approval at the May 2024 Annual General Meeting, UBA introduced a N400 billion Equity Shelf Programme, of which this rights issue is the initial phase.
“UBA’s Rights Issue aims to raise N239.4bn, through the issuance of new ordinary shares to our shareholders. The primary objective of this Rights Issue is to further strengthen our capacity to take advantage of growth opportunities and sustain our leadership in the banking industry,” Elumelu stated in his message to investors.
Elumelu detailed how the proceeds from this initiative would support UBA’s compliance with regulatory standards while also expanding its capacity for lending, investing in digital technologies, enhancing sustainable business operations, and fueling the group’s expansion across Africa.
Emphasizing UBA’s commitment to economic development in Africa, Elumelu also highlighted the bank’s influential role in the region’s financial landscape.
“Our historic partnership with the Africa Continental Free Trade Area Secretariat, where UBA pledged up to $6bn in financing over the next three years to support eligible SMEs across Africa, underscores our commitment to fostering economic development,” he added.
The application process for this rights issue is accessible via the NGX e-offer portal, enabling shareholders to apply for their provisional allotments within the offer period.
Additionally, UBA clients can access their rights through the bank’s internet and mobile banking platforms, where they also have the option to apply for more shares beyond their initial allotment, as described in the Provisional Allotment Letter.
UBA’s robust financial performance underpins its capital-raising goals. The bank reported an impressive 83.2 percent year-on-year increase in gross earnings, which rose from N1.31 trillion in Q3 2023 to N2.39 trillion at the end of the third quarter of 2024. Profit before tax climbed by 20.2 percent to reach N603.48 billion, while profit after tax rose by 16.9 percent to N525.31 billion.
UBA’s total assets surged as well, reaching N31.80 trillion, a 54 percent rise from N20.65 trillion at the close of 2023.
Highlighting UBA’s growing reputation, the bank received the ‘Bank of the Year’ title in eight subsidiaries across Africa, including Cameroon, Chad, Ghana, Côte d’Ivoire, Mozambique, Republic of Congo, Sierra Leone, and Tanzania.
UBA also earned the Regional Award for Africa and won recognition in 2024 as the “World Best Frontier Markets Bank” and “Best SME Bank Africa.”
With a customer base exceeding 45 million people across more than 1,000 branches in 20 African countries, UBA remains a formidable player in the African banking industry, ready to leverage its expanded capital for growth and innovation.
