This move comes right after the bank released its Q3 2024 financial results, which revealed a staggering 101.88% increase in pre-tax profit, hitting N194 billion, and a total of N603.4 billion over the past nine months, showcasing solid financial progress.
The rights issue, submitted through UBA’s stockbroker, United Capital Securities Limited, offers shares at N35.00 each, with a nominal value of 50 kobo per share.
The plan is to offer one new share for every existing share held, and it’s open to shareholders as of the qualification date, November 5, 2024.
This was confirmed by Godstime Iwenekhai, who heads the Issuer Regulation Department, stating that the application is now under review by the NGX.
In Q3 2024, UBA saw impressive growth, thanks to better revenue and profitability, with interest income making up 77% of total earnings.
Even though there was a 19% drop in Q3, interest income from loans and advances to customers still made up 40.4% of total interest income for that quarter and 37% for the nine-month period. On the flip side, interest income from investments in securities increased, contributing 35% in Q3 and 42% over the first nine months, thanks to a strong performance earlier in the year.
The report highlighted a 101.88% year-on-year jump in pre-tax profit to N194 billion, with a total of N603.4 billion over nine months, indicating consistent financial growth.
UBA's stock performance in 2024 has been influenced by prevailing market conditions and investor sentiment.
The year commenced with the stock priced at N25.65, but it experienced a decline, closing January at N24.40. February continued this downward trajectory; however, March saw a turnaround with a notable gain of 24.16%. In the second quarter, news regarding recapitalization contributed to further declines, resulting in a share price of N20.30 by the end of July.
A positive shift occurred in August, as the stock rebounded, closing above N22 with trading volumes reaching 510 million shares. By September, UBA shares had risen to N28.30, and in October, the stock surpassed N29, driven by heightened trading activity.
The upward trend persisted into November, with the share price exceeding N35 on November 5, indicating a resurgence of investor interest in the bank's stock. UBA's rights issue marks a strategic move to strengthen its capital base while positioning itself for potential growth opportunities in the future.