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UBA mulls rights issue, private placement to meet capital requirements

UBA mulls rights issue, private placement to meet capital requirements

United Bank for Africa (UBA) plans to raise capital through rights issues or private placement to meet new capital requirements.

“The strategy may include a combination of options such as Rights Issue or Private Placement. The fact remains that we are confident in our ability to meet the CBN’s capital adequacy requirements and will keep investors informed as we progress,’’ Oliver Alawuba, UBA’s GMD/CEO, said.

He stated this during UBA 2023 full-year investors’ conference call on Friday, following the release of the bank’s financial result for the year ended December 31, 2023.

The Central Bank of Nigeria’s recent announcement of a ten-fold increase in minimum capital requirements for banks has put many in the race for fresh capital.

Read also: UBA to seek shareholders approval for capital raise

The minimum capital requirement was raised to N500 billion for those with international authorisation, N200 billion for commercial banks with national authorisation, and N50 billion for those with regional authorisation. The last such adjustment occurred nearly two decades ago.

He said that UBA was well capitalised with shareholders’ funds of more than N2 trillion. “We will in due course, raise the required component of capital in line with the CBN directive.”

The bank intends to manage non-performing loans (NPLs) through proactive credit monitoring, restructuring strategies for at-risk loans, and increased provisioning coverage.

“We expect to keep NPLs at 4.5 percent for the 2024 full year. This commitment to credit quality is to further strengthen our ability to support our customers, and protect shareholders’ value while contributing to overall economic activity, even in a dynamic economic environment,” he explained.