UBA targets N144.8bn capital raise as base hits N355bn in 2024

• Shareholders approve N3.00/share dividend

Onome Amuge

Tony Elumelu, chairman, UBA

United Bank for Africa (UBA) Plc has announced a significant strengthening of its capital base, reaching N355.2 billion, as the pan-African lender progresses towards meeting the Central Bank of Nigeria’s (CBN) newly mandated N500 billion minimum capital requirement for commercial banks with international authorisation.

Group Chairman Tony Elumelu, issued the disclosure  at the bank’s 65th Annual General Meeting (AGM), held recently at the Transcorp Hilton Hotel in Abuja.

The event also saw shareholders deliver a vote of confidence in the pan-African financial institution’s drive, approving a final dividend of N3.00 per share for the 2024 financial year, culminating in a total payout of N5.00 for the year. The total dividend of N5.00 per share, which includes an interim dividend of N2.00 paid in October 2024, represents a pay-out ratio of 26.6 per cent of the bank’s earnings for the year.

Elumelu, in his address to the stakeholders, outlined the bank’s proactive measures to comply with the CBN’s capitalisation threshold. He informed shareholders that UBA’s capital was N116 billion in 2024. However, he highlighted the considerable success of the rights issue launched in November 2024. “Following the rights issue that we launched in November last year, which was oversubscribed, N251 billion has been verified and approved by the Central Bank of Nigeria,” he stated.

Elumelu further elaborated on the mechanics of the capital raise and the enthusiastic response from the bank’s investor base. “However, given that it is a rights issue, we could only take up N240 billion in the amount we set out to raise in the rights issue. This left an oversubscribed position of N11.6 billion naira, which had to be returned to the shareholders. So we thank you, shareholders, for your unprecedented confidence and commitment to UBA,” Elumelu acknowledged, expressing gratitude for the strong support.

Providing a clear roadmap for achieving full compliance with the CBN’s directive, Elumelu announced that the group’s new capital currently stands at N355.2 billion. According to him, the remaining N144.8 billion required to meet the regulatory threshold will be raised later this year (2025), and the proceeds from the rights issue will be duly invested in additional technologies and business growth in Nigeria, across Africa and the globe.

Reviewing the group’s financial performance in 2024, the group chairman reported a robust year, with gross revenue reaching N3.2 trillion and profit after tax hitting N767 billion. The bank also demonstrated strong deposit mobilisation, growing total deposits by 42 per cent to N24.6 trillion, up from N17.4 trillion in 2023. Furthermore, UBA’s loan book expanded by 35 per cent to N7.5 trillion, up from N5.5 trillion.

Elumelu pointed out the strength and diversification of UBA’s balance sheet, with total assets closing at N30.3 trillion and shareholders’ funds reaching N3.4 trillion (equivalent to $3.2 billion). He attributed these strong results to the execution of the group’s long-term strategy and the dedication of its staff in providing valuable solutions and services.

Elumelu also underscored UBA’s extensive reach and impact across the continent and beyond. “UBA is proud to support businesses, government, and consumers across Africa globally. It is worth repeating, we serve over 45 million people across four continents, in 24 countries, and with a corporate client base that is truly global. So when your bank is serving 45 million people, that is many countries put together as a population,” he stated, emphasising the scale of UBA’s operations.

Oliver Alawuba, the group managing director/ chief executive officer, described the group’s 2024 financial performance as a testament to its strategic priorities.

The GMD also underscored UBA’s customer-centric approach and its commitment to enhancing service delivery through digital innovation. According to Alawuba, the primary focus of UBA is the customer. He noted that the customer is the reason why they  exist as UBA and they want to make sure that they improve the customer experience.

He highlighted the bank’s strong investments in digital platforms to improve customer interactions. “These days, the best way to improve customer experience when serving about 45 million customers around the world is through digital banking. So we’re investing heavily in digital banking to improve your experience when you interact digitally or even physically with UBA,” he explained.

Alawuba also encouraged shareholders to embrace the bank’s digital offerings, linking this to the ongoing capital raise. “I encourage everyone here to make sure you have your own card. It’s very important, and that’s what we are raising money. You asked what we are going to do with the money we are raising? We are going to use it to invest in digital platforms and improve your digital experience with UBA. You know it is a world of artificial intelligence. You have heard that we are moving in that direction too, because that will improve our service to you.”

Addressing shareholder feedback and complaints, Alawuba underscored the bank’s commitment to continuous improvement. “What you call complaints, we don’t call them complaints. We call them feedback. This feedback is important to us. We use it to improve your service experience. What we have done is establish what we call a customer fulfillment center. Any complaint will go to them and they will address it very quickly. We’re also improving the technology around managing feedback and enhancing your experience, so that once you send any complaint, we’ll respond promptly.”

The AGM also saw the re-election of Tony Elumelu as the chairman of the Board of Directors, a move widely interpreted as a sign of stability and continued strategic direction for the bank.

Ben Ejenbi, representing the shareholder community, commended the continuous growth and efforts of the managers of the bank which he said had culminated to the consistent progress and growth recorded.