United Bank for Africa (UBA) Plc has initiated a rights issue to raise N239.4 billion, issuing 6,839,884,274 ordinary shares at 50 kobo each, priced at N35 per share. The move comes as part of the bank’s effort to meet new capital requirements set by the Central Bank of Nigeria (CBN).
The rights issue, which began on Friday, offers existing shareholders the opportunity to purchase one new share for every five they held as of November 5, 2024.
In a letter to shareholders, UBA Group Chairman Tony Elumelu explained that the initiative follows shareholder approval at the bank’s Annual General Meeting in May 2024, which authorized a N400 billion Equity Shelf Programme. The rights issue marks the first step in UBA’s broader capital-raising strategy.
Elumelu outlined the purpose of the capital raise, noting, “UBA’s Rights Issue aims to raise N239.4 billion 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.”
He added that the funds raised will go beyond regulatory compliance and be used to bolster the bank’s lending capabilities, enhance digital infrastructure, promote sustainable business practices, and further expand UBA’s operations across Africa.
The UBA chairman also highlighted the bank’s economic impact on the continent, referencing its partnership with the Africa Continental Free Trade Area (AfCFTA) Secretariat. Through this initiative, UBA pledged up to $6 billion in financing over three years to support eligible small and medium-sized enterprises (SMEs) across Africa, demonstrating its commitment to fostering economic growth.
Shareholders can access their rights through the NGX e-offer portal during the offer period. Customers of UBA are also encouraged to apply via the bank’s internet and mobile banking channels for added convenience.
This capital raise comes as UBA reports strong financial performance. For the third quarter, gross earnings grew by 83.2% year-on-year to N2.39 trillion, up from N1.31 trillion in the same period in 2023. Profit before tax increased by 20.2% to N603.48 billion, and profit after tax rose 16.9% to N525.31 billion. Total assets climbed to N31.80 trillion, marking a 54% increase from December 2023’s N20.65 trillion.
UBA has also received numerous accolades in recent years, including the ‘Bank of the Year’ awards for several subsidiaries across Africa and recognition as the World Best Frontier Markets Bank and Best SME Bank Africa in 2024.
Serving over 45 million customers across 20 African countries, UBA operates through more than 1,000 business offices and touchpoints, further solidifying its position as one of Africa’s leading financial institutions.
