UBA's N239.4 Billion Rights Issue: A Promise Of Greater Returns

United Bank for Africa (UBA) Plc has unveiled plans to leverage the proceeds of its ₦239.4 billion rights issue to expand digital capabilities and grow its business footprint across Africa and beyond. This strategic initiative aims to further cement UBA’s position as a top-tier pan-African banking leader with over seven decades of exceptional performance.

UBA is offering 6.84 billion ordinary shares of 50 kobo each at ₦35 per share to existing shareholders. This offer is allocated on a 1:5 basis, meaning one new ordinary share for every five shares held as of November 5, 2024. The rights issue is scheduled to close on December 24, 2024.

Enhancing Shareholder Value

Tony Elumelu, the Group Chairman of UBA Plc, emphasized that the primary objective of the rights issue is to strengthen the bank’s pan-African dominance while maintaining its legacy as a highly rewarding institution for shareholders.

He reassured shareholders that the bank remains committed to delivering consistent and enhanced returns. “This rights issue will help ensure our shareholders continue to reap undiluted benefits from a stronger, more innovative, and resilient financial institution,” Elumelu stated.

UBA has consistently outperformed market expectations, delivering a remarkable 375% capital gain to investors over the past five years. This far exceeds the average performance of the Nigerian stock market and the financial services sector. Additionally, UBA boasts one of the highest dividend payouts, with an interim dividend of ₦2 per share, reinforcing its reputation as a shareholder-friendly institution.

Driving Growth and Innovation

Proceeds from the rights issue will be used to drive organic growth, enhance international operations, and support expansion into new markets. Notably, UBA recently signed an agreement to commence full banking operations in France, a move that underscores its global ambitions.

Retail shareholders have expressed confidence in the initiative, pointing to UBA’s consistent track record of strong financial performance and investor-focused policies.

With the planned investments in digital technology and expanded operations, UBA is poised to strengthen its competitive edge and deliver even greater value to stakeholders.