|
Listen now
Getting your Trinity Audio player ready...
|
Investors who bought into the most recently concluded United Bank for Africa (UBA) Rights Issues in 2024 and 2015, saw an average share price gain of 21% nine months to one year later.
Analysts say the trend confirms that current investors of UBA that have bought into its latest Rights Issue at N50 per share, which concluded on September 19, 2025 are also set to smile with solid capital gains in a few months’ time.
Existing UBA shareholders in an offer which closed December 24, 2024, received the right to purchase new shares. Shareholders could apply to subscribe for new shares at the offer price of ₦35.00. The proceeds were used to boost the bank’s capital base and support its strategic growth initiatives.
The UBA share price afterwards have risen to close at N42.45 per share as at Tuesday October, 07, 2025 to the delight of investors who have seen capital gains of 21%.
On July 7th, 2015 UBA also announced that it successfully completed its Rights Issue, following the approval of the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC).
UBA raised N11.5 billion through a seasoned equity offering; a Rights Issue of one (1) ordinary share for every existing ten (10) units at a price of N3.50 each. The Offer was fully subscribed by its shareholders.
A year later on July, 09 2016, the United Bank for Africa (UBA) share price closed trading at N4.32 per share, gaining significantly during the year, reaching 23% above its N3.50 price at the conclusion of its Rights Issue.
United Bank for Africa’s (UBA) most recent rights issue was launched in 2025 as part of its ₦400 billion Equity Shelf Programme.
Details of the Rights Issue are listed below:
- Rights acceptance opened July 30, 2025, and was scheduled to close September 5, 2025, before being extended to September 19, 2025.
- Issue Price: ₦50 per share (50 Kobo nominal value but offered at ₦50)
- Amount Raised: Approximately ₦157.8 billion
- Number of Shares Offered: About 3.16 billion shares
- Rights Ratio: 1 new ordinary share for every 13 existing shares held at the record date (July 16, 2025)
- Purpose: To meet regulatory capital requirements mandated by the Central Bank of Nigeria and support strategic expansion initiatives
- Listing: New shares are expected to be listed on the Nigerian Exchange (NGX) around November 2025 after allotment
UBA current share price is no cause for alarm
Company shares sometimes trade below the rights issue price because the issuance increases supply and dilutes earnings.
A rights issue increases the total number of shares outstanding as new shares are issued.
The company’s earnings are now spread over a larger number of shares, diluting earnings per share (EPS), which tends to reduce the value per share.
Theoretical Ex-Rights Price (TERP) Adjustment
After a rights issue, the theoretical market price (TERP) factors in the new shares and the discounted issue price, which sets a new baseline often below the pre-rights share price.
Share prices tend to adjust to this new equilibrium, which can be below the rights issue price if the market’s outlook is cautious.
This explains why prices often dip below the rights issue price initially but may recover depending on the company’s performance and investor confidence.
UBA Rights Issue to boost long-term growth and share price
If a company however effectively uses the raised capital for growth or debt reduction, the share price will recover and surpass previous levels over the long term.
This UBA Rights Issue is a strategic initiative under its ₦400 Billion Equity Shelf Programme aimed at strengthening its capital base to support lending, digital transformation, and expansion across Africa and key international markets.
United Bank for Africa (UBA) has outlined the following uses for its new capital raised:
Capital Adequacy: To strengthen UBA’s capital base to meet regulatory requirements and enhance its competitiveness.
Expansion: To provide fresh capital to drive UBA’s growth and expansion across its African footprint, empower SMEs and promote sustainable business practices.
Digital Investment: To support investments in digital infrastructure, offering seamless banking experiences.
Shareholder Value: To allow existing shareholders to increase their stake at a discounted price and participate in the bank’s growth strategy.
Lending: Expanding Lending Capacity to drive economic growth.
UBA’s financial performance has been outstanding, with Profit After Tax rising to ₦766.57 billion in FY 2024 from ₦607.70 billion in FY 2023. The Bank’s total assets surged to ₦30.3 trillion in 2024, reflecting its strong liquidity position and continued leadership across the continent.
Follow the MoneyCentral Nigeria channel on WhatsApp: Click here!
