The United Bank for Africa (UBA) Plc has unveiled its ambitious N239.4 billion Rights Issue, a strategic move aimed at bolstering its digital infrastructure, expanding operations across Africa and beyond, and strengthening its position as a leading pan-African financial institution. Group Chairman, Mr. Tony Elumelu, emphasized that the Rights Issue aligns with the bank’s long-term growth strategy, ensuring enhanced value for shareholders and stakeholders alike.

The Rights Issue: Key Details

UBA’s N239.4 billion Rights Issue offers 6.84 billion ordinary shares of 50 kobo each to existing shareholders at N35 per share. The offer is pre-allotted on the basis of one new share for every five shares held as of November 5, 2024, and is scheduled to close on December 24, 2024.

Strategic Objectives: How the Rights Issue Will Drive UBA’s Growth

Mr. Tony Elumelu explained that the proceeds from the Rights Issue will be deployed strategically to accelerate growth, enhance innovation, and solidify UBA’s status as a pan-African banking powerhouse. Key areas of focus include:

1. Investment in Digital Technologies

UBA plans to channel a significant portion of the proceeds into upgrading its digital infrastructure. This investment will:

• Improve customer experience through seamless, secure, and innovative digital banking solutions.
• Enhance operational efficiency with advanced technology.
• Strengthen UBA’s fintech capabilities to compete with emerging digital banking platforms.

2. Business Expansion in Africa and International Markets

UBA’s Rights Issue will drive its organic expansion across key markets. This includes:

• Strengthening existing operations in 20 African countries where UBA currently operates.
• Expanding international presence, particularly in Europe and North America. Notably, UBA recently signed an agreement to commence full banking operations in France, a critical gateway to European markets.

Elumelu noted that the expansion will position UBA as the preferred financial partner for Africans within the continent and in the diaspora.

3. Strengthening Capital Base

The Rights Issue will further strengthen UBA’s capital position, ensuring resilience and compliance with evolving regulatory requirements. This fortified capital structure will:

• Enable UBA to fund large-scale projects and partnerships.
• Support its risk management framework, fostering financial stability.

UBA’s Impressive Track Record: A Key Driver of Investor Confidence

UBA has a strong history of delivering exceptional returns and value to its investors, which has fueled optimism surrounding the Rights Issue. The bank’s performance highlights include:

1. Market-Leading Returns:
   • UBA delivered 375% capital gains to investors over the past five years, significantly outperforming the Nigerian stock market and the broader financial services sector.
2. High Dividend Yields:
   • UBA holds the record for the highest dividend payout in the Nigerian banking sector, with its interim dividend of N2 per share ranking among the top three highest yields in the entire stock market.
3. Strong Shareholder Support:
   • Retail shareholders have expressed unwavering support for the Rights Issue, citing UBA’s consistent financial performance, investor-friendly policies, and the leadership’s commitment to sustainable growth.

UBA’s Growth Vision: A Pan-African Leader in Banking

Mr. Tony Elumelu emphasized that the Rights Issue will not only consolidate UBA’s leadership in Nigeria but also strengthen its pan-African growth strategy. He noted that UBA is uniquely positioned to:

• Drive financial inclusion across Africa by offering innovative banking solutions.
• Empower small and medium-sized enterprises (SMEs) to access financing for growth and job creation.
• Serve as a catalyst for cross-border trade and economic development within the continent.

Elumelu stated:

“This Rights Issue ensures that shareholders continue to derive undiluted benefits from a stronger, more innovative, and resilient pan-African banking group.”

Why UBA’s Rights Issue Matters for Shareholders and Nigeria’s Economy

The N239.4 billion Rights Issue comes at a pivotal time when Nigerian banks are navigating increased competition, regulatory pressures, and the need for technological innovation. UBA’s capital raise is expected to have the following impacts:

1. Enhanced Shareholder Value:
   • Existing shareholders can increase their equity stake at a discounted rate, positioning them for long-term gains as UBA executes its growth strategy.
2. Economic Growth:
   • UBA’s investments in digital banking, SMEs, and international expansion will stimulate economic activities, create jobs, and boost financial inclusion across the continent.
3. Financial System Resilience:
   • Strengthening UBA’s capital base enhances the bank’s ability to weather economic uncertainties while maintaining its leadership role in the financial sector.

Investor Sentiment: Strong Support for the Rights Issue

UBA’s long-standing reputation as one of Nigeria’s most investor-friendly institutions has bolstered confidence in the ongoing Rights Issue. Shareholders view this as an opportunity to support a bank that has consistently delivered strong financial results, robust dividends, and market leadership.

Financial analysts are optimistic about the outcome, citing UBA’s solid growth trajectory and strategic investments:

• Analyst Comment: “UBA’s Rights Issue is well-timed and strategic. The bank’s strong fundamentals and focus on digital innovation position it for sustained profitability and growth.”

Conclusion: UBA Poised for Greater Heights

UBA’s N239.4 billion Rights Issue represents a bold and strategic move to accelerate growth, innovation, and international expansion. With a focus on digital transformation, capital strengthening, and pan-African leadership, UBA is laying the foundation for a more resilient and profitable future.

As shareholders rally behind this initiative, UBA’s commitment to delivering exceptional value remains steadfast, ensuring that the bank continues to play a pivotal role in driving economic growth across Nigeria and the broader African continent.