UBA RAISES ₦11.5 BILLION FROM RIGHTS ISSUE

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United Bank for
Africa (UBA) said on Friday it had raised ₦11.5 billion ($57.8 million) by
selling new stock to existing shareholders to bolster its capital base.
The bank said the
rights issue was fully subscribed. It issued one new share for every 10 already
held at ₦3.50 per share, a discount to Thursday’s close of ₦4.25.
Nigerian lenders
have been shoring up their balance sheets in preparation for the adoption of
stricter international capital requirements, which would otherwise see capital
ratios for most of them drop by between 100 and 400 basis points to near the
regulatory minimum of 16 percent.
“With this
additional equity, UBA has fortified its capital base ahead of the full
implementation of Basel II, which requires (a) higher capital buffer for banks,”
the lender said.

Shares in the
bank, which fell 52 percent last year, were down 1.65 percent at ₦4.13.
Rival lender
Fidelity Bank on Monday raised ₦30 billion through an unsecured bond at 16.48
percent, to fund increased lending to small businesses and retail clients.
Skye Bank has
said it will raise ₦50 billion via a rights issue by the third quarter to
expand its loan book, after it sold ₦100 billion worth of commercial notes in
March.

Nigeria’s banking
sector index, which accounts for around 40 percent of total stock market
capitalisation, has lost 0.47 percent so far this year, having shed 22 percent
last year due to the heavy burden of tighter regulation which crimped profits.

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