Tony Elumelu Speaks on Plans for Proceeds from UBA’s N239.4bn Rights Issue

• UBA is offering 6.84 billion ordinary shares in its ongoing N239.4 billion rights issues, based on one new share for every five held
• The net proceeds will support investment in more digital technologies and organic business expansions
• The group will also strengthen international operations and start full banking operations in France as agreed

The United Bank for Africa (UBA) Plc has said it will use the net proceeds of its ongoing rights issue to invest in more business technologies and fund expansions.

Mr Tony Elumelu, the Group Chairman, stated that the rights issue would make the bank a highly rewarding financial institution for all backers while strengthening its position as an industry leader on the continent.

According to The Vanguard, the group chairman assured shareholders that the group is consolidating its seven and half decades of resilience and impressive results, and they would continue to receive undiluted benefits from the stronger and more resilient bank that would emerge from this rights issue.

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Having delivered over 375% capital gain in the last five years and consistently paying the highest dividends, UBA group boasts of outperforming the average of the financial services sector and the Nigerian Stock Exchange.

"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,” Elumelu said.

He added that the funds will expand lending capacity, support expansion particularly for the African operations, and support sustainable practices and driving economic growth in Africa.

Just recently, Legit NG reported that UBA signed an agreement to begin full-scale banking operations in France.

UBA announced, in November, the commencement of the rights issue of 6.84 billion ordinary shares of 50 kobo each to its existing shareholders at N35 per share, on the basis of one for every five ordinary shares held as of November 5, 2024. The rights issue will close on Christmas Eve, December 24, 2024.

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Other banks offering rights issue

The Central Bank of Nigeria announced an increase in capital requirements for commercial, non-interest, and merchant banks operating in Nigeria on March 28, 2024.

The CBN had instructed banks to fulfil the minimum capital requirement within 24 months, beginning April 1, 2024, and concluding on March 31, 2026.

Unlike the 2004 recapitalisation exercise, where total shareholders' funds were used, the current effort defines minimum capital as the combined value of share capital and share premium.

As a result, most banks will need to secure additional funds to retain their licenses. Nonetheless, this first round of capital-raising is expected to be the most significant in terms of value.

First Bank began its N150 billion rights issue, with the new shares priced at N25 per share.

Fidelity Bank also carried out its N127.2 billion rights offer earlier in the year, and other banks have also carried out theirs in the course of the year.

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CBN extends recapitalisation deadline for BDC operators

In another development, Legit.ng reported that the CBN extended the deadline for the recapitalisation of Bureau of De Change (BDC) operators from December 3, 2024, to June 3, 2025.

The president of the Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, stated this at a virtual emergency meeting by ABCON members.

Gwadabe explained that the apex bank extended the deadline by six months due to operators' low compliance with the recapitalisation requirements.

Source: Legit.ng