United Bank for Africa (UBA) Plc has raised N11.5 billion in a recent rights issue to shareholders.
The bank made the announcement following the approval of the Central Bank of Nigeria and the Securities and Exchange Commission on its equity offering of one ordinary share for every existing 10 units at a price of N3.50 each. The offer was fully subscribed by its shareholders.
The bank stated that it intends to strengthen its operations and improve its capital base ahead of the full implementation of Basel 2, which requires higher capital buffer for banks to accommodate credit as well as operational and market risks in the business of financial intermediation.
Group Managing Director, UBA, Phillip Oduoza, said at the announcement, “I am pleased with the successful completion of this rights issue, as it provides further leverage to exploit our growth potential.
“On behalf of the management of UBA, I appreciate the shareholders for their strong commitment towards the growth of our dear bank and for the unwavering confidence reposed in us in building a great pan-African institution.
“We will remain true to our promise of delivering superior and sustainable returns to all stakeholders over the near to long term, just as we are committed to the development of the African economies where we operate.”
The rights issue is coming on the heels of an earlier offer in December 2014, in which UBA raised N30.5 billion in tier-2 capital through fixed rate unsecured notes, maturing in 2021.
The bank has also completed the dual listing of its corporate bond on the Financial Market Dealers Quotation Over-the-Counter market and the Nigerian Stock Exchange.
Group Chief Financial Officer, Ugo Nwaghodoh, explained that, “This additional equity provides further capital buffer for us to grow our business over the medium term, with a strong positive outlook on delivering our performance guidance for the year.”
Results for the bank’s first quarter, which ended in March 2015, showed that its earnings rose by 22 per cent to N83 billion from N68 billion in the comparative period of 2014.