UBA Targets Additional N157bn in Rights Issue, Extends Recapitalization Push Amid Strong Q1 Earnings

United Bank for Africa (UBA) Plc is intensifying efforts to shore up its capital base, announcing a fresh plan to raise over N157 billion through a rights issue as part of a broader strategy to meet the Central Bank of Nigeria’s (CBN) recapitalization mandate.

The move underscores the urgency among Nigerian banks to comply with the apex bank’s directive, which aims to fortify the country’s financial sector against economic shocks and currency volatility.

In a notice to trading license holders, the Nigerian Exchange Limited (NGX) disclosed that UBA, through its stockbroker United Capital Securities Limited, has filed an application for the approval and listing of 3,156,869,665 ordinary shares of 50 kobo each. The rights issue, priced at N50.00 per share, will be offered on the basis of one new share for every thirteen ordinary shares held by shareholders as of July 16, 2025.

This latest offering is the second capital raise by UBA within a year. In November 2024, the lender had initiated a rights issue to raise N239.4 billion through the sale of over 6.8 billion shares at N35.00 each. That offering was oversubscribed, with bids exceeding N251 billion. However, in line with its cap, UBA accepted N240 billion, bringing its capital base to N355.2 billion — well on its way to meeting the new regulatory minimum.

The latest effort will further bridge the capital gap as UBA aims to fully comply with the CBN’s recapitalization deadline of March 31, 2026. Under the policy introduced by the CBN in March 2024, commercial banks with international licenses are required to raise their minimum capital to N500 billion, while national banks must raise N200 billion and regional banks N50 billion. The capital computation excludes retained earnings, share premium, and revaluation reserves, meaning banks must raise fresh equity to meet the threshold.

The policy, described by the CBN as a move to “strengthen the resilience of Nigeria’s banking system,” was driven by concerns over the depreciation of the naira, high inflation, and increased macroeconomic risks. Many banks, including UBA, have since adopted phased recapitalization strategies combining rights issues, public offers, and in some cases, mergers or acquisitions to meet the target.

UBA’s recapitalization journey has been reinforced by its strong financial performance. For the first quarter of 2025, the bank posted a pre-tax profit of N204.27 billion — a 30.65% rise from N156.3 billion in the same period last year. Net profit hit N189.84 billion, reflecting a 33.15% growth year-on-year. These earnings were fueled by robust interest income, which climbed to N599.83 billion, up 36% from Q1 2024. The bulk of this came from loans and advances (N260.56 billion) and investment securities (N291.86 billion).

Non-interest income also surged, with electronic banking generating N47.84 billion and account maintenance fees contributing N10.39 billion. The bank’s balance sheet continues to reflect operational strength, with strategic investments in technology and expansion into key African markets paying off.

UBA’s continued capital raise reaffirms its commitment to maintaining its international banking license and supporting its pan-African footprint. For shareholders, the latest rights issue offers another opportunity to deepen their equity in one of Nigeria’s leading financial institutions, even as the industry braces for a new era of capital adequacy and competition.

As the recapitalization deadline inches closer, UBA — like many of its peers — appears to be racing against time. Already, several banks, including Zenith, GTCO, Access Holdings, and FBN Holdings, have unveiled similar plans, issuing public and rights offers, pointing to a sector-wide scramble to meet the CBN’s demands.