UBA Ready, Awaits SEC Approval For New Capital Raise

The Pan African lender is planning to raise significant capital from its existing shareholders and prospective investors as it looks to comply with the recent regulatory capital base hike imposed by the Central Bank of Nigeria (CBN). The new capital will also better position the 75 years old lender to support small and medium-sized enterprises (SMEs) businesses that are crucial for job creation and economic development.

The UBA’s boss said to investors and analysts, “We are at an advanced stage with our recapitalization process. Our application has been submitted to the SEC and we expect its approval in the next couple of weeks following which the market will be advised.”

He hinted that N401. 6 billon growth in profit before tax in H1 2024 is a reflection of its ability to manage risks effectively amidst macroeconomic volatility.

Alawuba noted that UBA’s intermediation business posted impressive growth, with net interest income expanding by 143 per cent year-on-year to N675 billion in H1 2024, further underlining the strength of its core banking operations.

For reporting 37 per cent growth in total assets, he said, “We saw a 37 per cent growth in total assets, reaching N28.3 trillion, up from N20.7 trillion at FYE 2023. This growth was driven by strong customer relationships and our ability to capitalise on opportunities across geographies.

“Our customer deposits grew by 34 per cent, from N17.4 trillion at year-end 2023 to N23.2 trillion in H1 2024, demonstrating the trust and loyalty of our customers.”

He said that UBA’s digital banking income surged by 107.8 per cent YoY to N106 billion in H1 2024, while funds transfer and remittance fees rose 188.7 per cent and 228 per cent, respectively.

“We continue to lead in digital banking and payment solutions, helping drive financial inclusion across Africa,” the UBA boss added.

Alawuba, stated that the economic environment in H1 2024 remained challenging across the regions where it operates.

He highlighted high inflation, rising debt levels, increasing interest rates, and tighter monetary policies that have created significant pressure on economies globally, maintaining that despite these headwinds, UBA has demonstrated resilience.

According to him, UBA in H1 2024 delivered strong double-digit growth across high-quality and sustainable revenue streams.

“This performance reflects our disciplined execution of strategic goals, focusing on balance sheet expansion, transaction banking, and digital banking businesses across our markets,” he said.

On building an even better bank, he said, “We continue to invest in building a better bank through improvements in People, Processes, and Technology.”

He revealed that the Pan-African financial institution recognized that people are its greatest asset and this year alone, it has promoted over 2,000 employees and paid the 2023 bonus to eligible staff across Nigeria and UBA Africa (ex-Nigeria).

He also said the Group has improved on its process amid its smart automation initiatives simplifying service delivery.

“For instance, our website now offers self-service options for BVN and NIN linkage, account updates, card blocking, and more. Additionally, a comprehensive review of our procurement processes has led to significant cost optimization.”

On Technology Investments, he added, “Our ongoing investments in technology are enabling us to deliver superior customer experiences, drive operational efficiency, and unlock new growth opportunities.”

He stated that UBA’s strategic partnerships remain central with its growth strategy.

“In 2024, UBA was one of six banks to sign a Memorandum of Understanding with the Pan-African Payment Settlement System (PAPSS), enhancing cross-border trade and financial integration across Africa. We successfully deployed instant payment systems in five African countries, with more to follow.

“Our collaborations with Telco partners have also expanded, with funds under management now exceeding $1 billion. These partnerships enable us to deliver impactful solutions such as micro-lending and savings products, enhancing financial inclusion.”

Looking ahead, Alawuba expressed that, “We enter the second half of 2024 from a position of strength. Our proven resilience, strong capital position, and market-leading capabilities position us to continue our growth trajectory. “Execution” will remain our driving force as we focus on market leadership and delivering excellent customer experiences at every touchpoint.”