Retail Shareholders In Massive Rally For UBA’s N239.4bn Offer

The United Bank for Africa (UBA) Plc’s N239.4 billion rights issue got off to a momentous start as shareholders indicated interests to buy more shares in the pan-Africa banking group.
UBA has opened acceptance list for a N239.4 billion rights issue, offering 6.84 billion ordinary shares of 50 kobo each to existing shareholders at N35 per share. The rights issue is pre-allotted on the basis of one new ordinary share of 50 kobo each to every five ordinary shares held as at November 05, 2024. The rights issue is scheduled to close on December 24, 2024.
Shareholders across Nigeria’s leading shareholders’ associations said they were mobilising supports for the N239.4 billion rights issue, describing the offer as a golden opportunity to lock in more values in the bank that has shown exceptional returns to shareholders.
UBA, which pays dividends twice a year, recently paid interim dividend of N2 per share on its first half results, the highest payout by any bank and one of the three highest yields in the entire stock market.
Minority retail shareholders constitute nearly three-quarters of UBA’s nearly 280,000 shareholders. More than 200,000 shareholders hold between one and 10,000 ordinary shares in one of Nigeria’s oldest most-widely owned banking group. Only one shareholder holds substantial equity stake of 5.30 per cent, as at the last audit.
In separate interviews, shareholders leaders and activists said UBA’s outstanding performance in creating values for shareholders through capital gains and dividends as well as its unique decision to distribute free shares to all shareholders that made them to be shareholders in at least four companies, all paying them dividends regularly.
The shareholders made reference to the situation in 2010 when the Central Bank of Nigeria (CBN) repealed universal banking licenses and issued the Regulation on Scope of Banking Activities & Ancillary Matters, No. 3 which became effective on November 15, 2010; prohibiting banks from undertaking non-banking activities.
While several banks had then opted to sell their non-banking subsidiaries, UBA alone had decided in a unique approach decided to unbundle the subsidiaries as standalone companies through distribution of their shares to all shareholders.
Founder, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, said UBA’s longstanding history of positive disposition to shareholders have endeared the group to the investing public.
He said the bank has proven to be dependable and resilient, noting that not only is UBA doing extremely well in its home market, but all its subsidiaries across Africa and beyond are also doing well.
Nwosu urged shareholders to pick up their rights, affirming that “he and members have already indicated interests in picking up their rights.”
President, Association for the Advancement of Rights of Nigerian Shareholders (AARNS), Dr. Faruk Umar, said the decision to undertake a rights issue to existing shareholders underscores continuing trust between the bank and its shareholders.
Citing the performance of the bank in the past three quarters and its record-setting interim dividend of N2 per share, Umar described UBA as a ‘solid bank’ with a lot more to offer the shareholders in the future.