By Ayomide Otitoju
United Bank for Africa Plc (UBA) announced on Friday the launch of a N239.4 billion rights issue, aiming to issue 6,839,884,274 ordinary shares at N35 per share. This capital raise responds to the Central Bank of Nigeria’s (CBN) updated minimum capital requirements for Nigerian banks, allowing UBA to further bolster its financial strength.
The rights issue, open to existing shareholders, permits holders to purchase one new ordinary share for every five shares held as of November 5, 2024. The initiative follows shareholder approval at UBA’s Annual General Meeting in May, where the bank authorized the establishment of a N400 billion Equity Shelf Programme. Group Chairman Tony Elumelu underscored that the rights issue is the first step in UBA’s broader capital-raising strategy to support its growth and market leadership.
“This rights issue aims to raise N239.4 billion to strengthen our capacity, enabling us to seize growth opportunities and solidify our position in the banking sector,” Elumelu stated in a letter to shareholders.
According to Elumelu, the funds raised will go beyond meeting regulatory requirements. Proceeds will be invested to expand UBA’s lending capacity, enhance digital infrastructure, support sustainable practices, and grow the bank’s African footprint. He highlighted UBA’s dedication to African economic development, including its partnership with the African Continental Free Trade Area (AfCFTA) Secretariat, where the bank pledged $6 billion over three years to support small and medium enterprises across the continent.
The rights issue will be available for subscription exclusively on the NGX e-offer portal, and shareholders can apply for additional shares beyond their initial allotment. UBA account holders are encouraged to access their rights through the bank’s internet and mobile banking channels.
This announcement comes as UBA reports robust financial performance, with gross earnings up by 83.2% year-on-year to N2.39 trillion in Q3 2024, compared to N1.31 trillion in 2023. The bank’s profit before tax rose 20.2% to N603.48 billion, while profit after tax increased 16.9% to N525.31 billion. UBA’s total assets also surged by 54% to N31.80 trillion by the end of September 2024, compared to N20.65 trillion at the close of December 2023.
In the past year, UBA was recognized with ‘Bank of the Year’ awards in eight subsidiaries and regional accolades for Africa, adding to 2024 titles as World’s Best Frontier Markets Bank and Africa’s Best SME Bank. UBA serves over 45 million customers through 1,000 offices across 20 African countries.
