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UBA raises N11.5b in rights issue

In from Success Allantee…

United Bank for Africa (UBA) Plc achieved full subscription to its recent rights issue; successfully raising N11.5 billion from existing shareholders to beef up its capital base. The Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) have both approved the final allotment for the rights issue.

UBA had floated a rights issue of N11.5 billion on the basis of one ordinary share of 50 kobo each for every 10 shares already held at a price of N3.50 per share.

Group managing director, United Bank for Africa (UBA) Plc, Mr Phillips Oduoza, said with the additional equity, UBA has fortified its capital base ahead of the full implementation of BASEL II, which requires higher capital buffer for Banks, to accommodate credit, operational and market risks inherent in the business of financial intermediation.

“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,” Oduoza said.

He assured that the bank would remain true to its promise of delivering superior and sustainable return to all stakeholders over the near to long term, just as it remains committed to the development of the African economies where it operates.

UBA, in December 2014, had also successfully raised N30.5 Billion Tier-II capital through the issuance of seven-year fixed rate unsecured notes, maturing in 2021.

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The bank had also gone ahead to complete a dual listing of its corporate bond on the Financial Market Dealers Quotation Over-the-Counter (FMDQ-OTC) market and the NSE, the first Nigerian company to do so.

“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” said the bank’s group chief financial officer, Mr. Ugo Nwaghodoh.

UBA, early this year, released its financial performance report for the first quarter of 2015, showing strong growth in earnings and profits.

The first quarter results for the period ended March 2015 shows earnings rose 22% to N83 billion from N68 billion in the comparative period of 2014. The bank’s operating income was also up a significant 17% to N53 billion compared to N45 billion within the same period benefiting from higher yields on earnings assets.

With operating expense growing at a marginal 3.5%, UBA declared a pre-tax profit of N18 billion in the first quarter 2015, a significant 36% increase compared to the same period of 2014.

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