United Bank for Africa Plc (UBA) has announced plans to raise over N157 billion through a rights issue.
This move is aimed at strengthening its capital base and supporting its long-term growth strategy.
Key Details of the Rights Issue:
1. Amount to be raised: Over N157 billion.
2. Shares offered: 3,156,869,665 ordinary shares.
3. Offer price: N50.00 per share.
4. Basis of offer: One new ordinary share for every thirteen ordinary shares held.
5. Qualification date: Wednesday, July 16, 2025.
6. Stockbrokers: United Capital Securities Limited.
7. Regulatory body: Nigerian Exchange Limited (NGX) has received the application for approval and listing.
This capital raise aligns with UBA's strategic objectives, which include enhancing capital adequacy, expanding into new markets, and investing in technology infrastructure.
It also reflects broader industry efforts to meet regulatory capital buffers and support anticipated Basel III compliance, especially with the Central Bank of Nigeria's (CBN) N500 billion minimum capital requirement for international commercial banks by Q3 2025.
UBA's Financial Performance:
UBA reported a profit before tax of N803.73 billion for the 2024 financial year. This significant profit was driven by solid core earnings and improved operational efficiency.
The bank's gross earnings also grew substantially from N2.08 trillion in 2023 to N3.19 trillion in 2024, representing a 53.6% growth. Profit after tax increased by 26.14% to N766.6 billion.
Impact on Shareholders:
The rights issue is being offered at N50.00 per share, which analysts believe represents a premium valuation and reflects UBA's strong fundamentals and investor appetite.
Existing shareholders have the opportunity to increase their holdings and maintain their proportional ownership in the bank. This method of capital raise is often seen as beneficial to existing shareholders as it provides them with the first opportunity to invest at a potentially discounted price compared to the market.
UBA's Chairman, Tony Elumelu, has previously indicated that the bank aims to complete its N500 billion capital requirement by Q3 2025, ahead of the CBN's March 2026 deadline.
He also assured shareholders that the bank would prioritize their interests by opting for a rights issue over a public offering, aiming to protect the value created over decades.
This is not UBA's first rights issue as it had a previous one that closed in December 2024, offering 6.84 billion ordinary shares at N35 per share. That offering was oversubscribed.