UBA seeks approval for planned rights issue

• Published On: 07 November 2024 at 18:59

The United Bank for Africa has formally requested approval from the Nigerian Exchange Limited for its planned rights offering.

In a market bulletin issued on Tuesday and signed by Godstime Iwenekhai, Head of the Issuer Regulation Department at NGX RegCo, the bank confirmed that it has engaged its stockbrokers, United Capital Securities Limited, to assist with the process.

The rights issue is part of UBA's capital-raising strategy, though more information on the offer's size and terms has yet to be disclosed.

The proposed rights issuance involves "Six Billion, Eight Hundred and Thirty-Nine Million, Eight Hundred and Eighty-Four Thousand, Two Hundred and Seventy-Four (6,839,884,274) ordinary shares of 50 Kobo each at N35.00 per share based on one new ordinary share for every five ordinary shares held as at the close of business on Tuesday, 5 November 2024," the notice's first section states.

In the most recent NGX trading sessions, UBA shares traded as high as N35.05 and as low as N29.

The stock closed Wednesday at N31.55, down 9.99%.

Despite the dip, UBA shares have been actively traded in recent days, indicating increased market interest in the lender.

At the end of the third quarter, UBA reported that its gross earnings increased by 83.2% year on year to N2.39 trillion from N1.31 trillion in the same period in 2023.

UBA reported a significant increase in its financial performance for the third quarter of 2024. The bank's net interest income increased by 149% to N1.10 trillion, from N443 billion at the end of Q3 2023. Profit before tax increased by 20.2%, to N603.48 billion, up from N502.09 billion in Q3 2023.

Meanwhile, profit after tax increased by 16.9% to N525.31 billion, up from N449.26 billion the year before.

The bank's total assets increased by 54.0% to N31.80 trillion, from N20.65 trillion at the end of December 2023.

In a statement accompanying its most recent results, the bank attributed its growth to technology-driven initiatives aimed at improving customer experience, stating that these efforts have played a critical role in driving its performance over the last few years.