UBA to raise US$142.50m through rights issue

United Bank for Africa (UBA) Plc, is seeking an opportunity to raise US$142.50 million through a rights issue of 6,839,884,274 ordinary shares of US$0.03 each at US$0.021 per share.

The rights issue, which opened on Friday, November 15, 2024, will offer existing shareholders the opportunity to purchase additional shares in proportion to their current holdings which is being offered based on one new ordinary share for every five existing ordinary shares held by shareholders, as of November 5, 2024.

In his letter to the shareholders informing them, the Group Chairman of United Bank for Africa, Tony Elumelu, explained that following the resolution of the group’s shareholders at the annual general meeting held in May 2024, authorising the establishment of the US$238.10 million equity shelf programme.

He said UBA would embark on a rights issue, as the first step in its broader capital raising programme.

“UBA’s rights issue aims to raise US$142.5 million, 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,” Mr Elumelu said.

Explaining the use of proceeds, he said beyond regulatory compliance, the funds would expand the group’s lending capacity, investment in digital infrastructure, support sustainable business practices and expand its African operations.

Commitment

Mr Elumelu said the UBA was committed to drive economic growth across Africa.

“Our historic partnership with the Africa Continental Free Trade Area (AfCFTA) Secretariat, where UBA pledged up to US$6 billion in financing over the next three years to support eligible SMEs across Africa underscores our commitment to fostering economic development,” he said.

The issuance is in compliance with the revised minimum capital requirements for Nigerian commercial banks announced by the apex banking regulator in Nigeria – the Central Bank of Nigeria (CBN) earlier this year.

UBA has consistently demonstrated growth and resilience, evidenced by the group’s strong financial performance and recent recognition within the industry.

The bank’s progressive dividend policy, which has seen an increase by 14.8 per cent annualised dividend yield, has demonstrated the group’s ability to reward shareholders consistently.

In 2023/2024, UBA won “Bank of the Year” Awards in eight of its subsidiaries - Cameroon, Chad, Ghana, Cote d’Ivoire, Mozambique, Republic of Congo; Sierra Leone; Tanzania, as well as the regional award for Africa and in 2024 has won World Best Frontier Markets Bank and Best SME Bank Africa.

New ordinary shares

Application for the provisional allotment of the rights to the new ordinary shares will be made exclusively through the NGX e-offer portal during the offer period, while existing shareholders may also apply for additional shares above their provisional allotment as described in the Provisional Allotment Letter.

Shareholders who are customers of the bank are also encouraged to access their rights through UBA’s internet banking and mobile banking channels.

United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than forty-five million customers, across 1,000 business offices and customer touch points in 20 African countries.

With a unique international presence in New York, London, Paris and Dubai, UBA is connecting people and businesses across Africa and globally, through retail, commercial, corporate and institutional banking, innovative cross-border payments and remittances, trade finance and related banking services.