Details: How Customers Will Benefit Directly From UBA’s Rights Issue

The pan-African financial service group catering to the needs of over 45 million customers, United Bank for Africa (UBA), on Friday, November 15, 2024, opened its N239.4 billion rights issue.

The financial powerhouse seeks to raise N239.4 billion through a rights issue of 6,839,884,274 ordinary shares of 50 kobo each at N35.00 per share.

The move, made with the primary objective of strengthening the bank’s capacity to take advantage of opportunities—in line with new capital requirements for Nigerian commercial banks—and sustaining its leadership position, offers existing shareholders the opportunity to purchase additional shares in proportion to their current holdings based on one new ordinary share for every five existing ordinary shares opened on November 5, 2024.

But what are the gains for customers of the rated financial institution operating in 20 African countries, as well as the United Kingdom (UK), the United States of America (USA), France, the United Arab Emirates, and with fresh moves to establish operations in Saudi Arabia?

Checks revealed the N239.4 billion rights issue points to a massive transformative change for the customers of one of Africa’s leading financial institutions.

Inside information indicates that targeted operational improvements in innovative services include reinforcing the bank’s digital banking platforms.

With additional funds, the bank—which posted a profit before tax of N603.48 billion (a 20.2% increase) at the end of the third quarter of 2024 and has established landmark steps with platforms like the AI-powered chatbot Leo—would invest in boosting technologies with the aim of providing customers faster, more secure, and seamless payment experiences.

From never-before-seen improvements in mobile apps to cutting-edge digital payment solutions, customers can look forward to more efficient and easy-to-use ways of managing their finances insiders say.

Already a pacesetter in tailored products with the UBA Braille account for the visually impaired (the first of its kind in Africa), the bank, celebrating 75 years of operation with consistent profitability, would be expending a share of the projected capital on crafting unique products for its customer base.

The bank, with master entrepreneur Tony Elumelu at the helm, boasts a diverse customer portfolio that spans individuals, SMEs, and large corporations.

“The capital from the rights issue would provide the opportunity to develop new products that meet the evolving specific needs of these groups of customers,” according to those who should know.

It is believed that UBA is already exploring innovative and more inclusive arrays of products, including increased numbers of low-interest loans for businesses, higher-yield savings accounts, and specialized investment packages.

Presently at the forefront of fostering economic development with multiple initiatives—including $6 billion in support for SMEs in partnership with the African Continental Free Trade Area (AfCFTA)—the in-crowd confirmed that another area the bank, with Oliver Alawuba as Chief Executive Officer (CEO), is looking to further entrench itself in is driving financial inclusion across Nigeria and Africa.

“The talks are that the rights issue to raise N239.4 billion strongly aligns with UBA’s vision of banking for all because it would help in channeling funds into financial inclusion initiatives. This would help reach more unbanked persons, groups, and communities. And it is a win-win for all because it will improve lives and also create growth opportunities for the bank,” the in-crowd disclosed.

Also not unconnected with driving financial inclusion are added claims that the bank, with a history of unceasing dividend payments, could use part of the expected capital to expand its reach through an increased ATM (Automatic Teller Machine) network and embrace more agent banking, particularly in underserved and rural areas.

Added checks revealed that the bank, which won “Bank of the Year” in 2023/2024 with eight of its subsidiaries—Cameroon, Chad, Ghana, Côte d’Ivoire, Mozambique, the Republic of Congo, Sierra Leone, and Tanzania—would also be boosting the core of its award-winning efficiency: customer service.

Widely recognized for its customer-focused approach, the injection of fresh capital is expected to strengthen its support services.

“And the projected gains in this for customers and the bank are apparently tremendous. With more resources, the bank can expand its customer service teams, introduce—among other things—multilingual support for its diverse clientele, and adopt advanced tools like AI to resolve issues faster and more efficiently. This makes financial services simplified for customers and, in return, enhances brand loyalty while turning customers into ambassadors,” an expert pointed out.

In general, multiple sources affirm the financial institution, which won the World Best Frontier Markets Bank and Best SME Bank in Africa awards, backed by the infusion of the targeted capital and complemented by its profitability, will be taking steps to position itself as a customer-first institution ready to meet future demands.

“With improved access to banking services, enhanced digital platforms, personalized financial solutions, and unbeatable customer support service, that positioning is inevitable,” an industry watcher asserted.