United Bank for Africa Plc (UBA) has announced plans to raise over ₦157 billion through a rights issue, offering new shares at a premium of ₦50 per share. This development comes at a time when UBA’s shares are trading around ₦46 on the Nigerian Exchange (NGX), raising significant attention among investors and market analysts.
The rights issue, as officially disclosed by the bank, will involve the issuance of 3.157 billion new ordinary shares to existing shareholders, on the basis of one new share for every 13 already held. The offer has been approved by the Securities and Exchange Commission (SEC) and is being managed by United Capital Securities Limited. The offer price of ₦50 per share represents a ₦4 premium over UBA’s current market price, which closed at ₦46.05 on July 18, 2025.
This pricing strategy has sparked diverse reactions in the investment community. Traditionally, rights issues are priced below the market value to incentivize participation. However, UBA’s decision to set the price above its current trading value signals confidence in its growth trajectory and financial fundamentals. Despite the pricing, analysts believe the move is strategically sound, considering the bank’s solid performance in recent quarters.
UBA reported a staggering Profit Before Tax (PBT) of ₦803.73 billion for the financial year 2024 an all-time high. The bank’s strong financial results, coupled with robust earnings from its pan-African operations, reinforce its position as one of Africa’s leading financial institutions. These factors likely influenced the bank’s decision to price the new shares at a premium, betting on investor trust and long-term value creation.
Market analysts are generally optimistic about UBA’s performance. CardinalStone Research recently assigned a “Buy” rating on the stock with a target price of ₦46.86, while Vetiva Research projects the stock could rise to ₦48, citing continued strength in net interest margins and balance sheet health. These projections suggest that the ₦50 share price, although slightly above market levels, may not be far-fetched in the near term.
Furthermore, the timing of the rights issue reflects the bank’s preparedness to meet upcoming regulatory capital requirements and support aggressive regional growth. UBA’s operations span across 20 African countries, as well as global financial centers in New York, London, Paris, and Dubai. Raising additional capital will position the bank to expand its loan book, invest in digital transformation, and maintain competitiveness in a rapidly evolving banking sector.
For shareholders, the offer presents a mixed opportunity. On one hand, participating at ₦50 may seem expensive relative to the current market price. On the other hand, the bank’s long-term outlook, earnings potential, and dividend consistency may justify the premium. The success of the rights issue will depend on investor confidence in UBA’s strategic direction and its ability to deliver sustained value.
