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As UBA Plc Prepares For Recapitalization

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UBA at 75

By Funsho Arogundade

For the United Bank for Africa (UBA Plc), its rich history is matchless. With its origins dating back to 1949, the bank, which prides itself as Africa’s global bank, has carved its niche as a leading financial institution in sub-Saharan Africa, growing into one of the continent’s most influential banks.

UBA’s evolution from a local Nigerian bank to a pan-African and global financial institution is remarkable. Its ability to balance its African identity with a global outlook has made it one of the most trusted and dynamic banks on the continent.

Of course, much has been said about the bank’s qualitative and quantitative values. For millions of UBA customers and its present —and prospective— shareholders, there is a guarantee qualitatively non-numeric value of the bank’s solid business model, firm brand value, competitive edge, and most importantly, a list of bright minds on its roster led by quick-witted entrepreneur, Tony Onyeamechi Elumelu —as Chairman— running its operations. Even, on its numeric value, the banking behemoth has consistently maintained a strong balance sheet.

Over the years, UBA has demonstrated sound financial management, risk mitigation, and strong capital adequacy ratios, all of which have contributed to its robust financial standing.

Many would recall the heydays of the banking sector consolidation boom between 2005 and 2007. Perhaps no other bank took, more seriously, to heart, the call by the then Central Bank of Nigeria (CBN) Governor, Charles Chukwuma Soludo, that Nigeria banks should aspire to be global players like UBA did. While many other banks also hearkened to that call, given the overwhelming advantages such economies of scale would bring to a bank, the then Tony Elumelu-led management of UBA quickly set about rebranding the bank as ‘Africa’s Global Bank’. Within a few years, the bank got full commercial licenses in many countries with these offshore branches adding value to the bank’s operations and diversifying its revenue base.

Over the decades, the bank has scaled its expansion offshore and forged ahead to increase its presence on the continent and today it stands out with its unique blend of a strong African identity and a global vision that spans across 20 African countries, as well as key international financial hubs, including New York, London, Paris, and Dubai.

“Our success is a testament to the effectiveness of UBA’s global strategy and our role as the financial intermediary for Africa and the world,” Elumelu said.

UBA has indeed created opportunities for millions of Africans to open accounts, secure loans, and engage in financial activities that were previously out of reach. This wide-reaching approach to financial inclusion aligns with UBA’s broader goal of contributing to economic empowerment across the continent. By making financial services accessible, UBA is supporting small and medium-sized enterprises (SMEs), agriculture, and other sectors that are vital to African economies.

The bank’s balance sheet, which has grown steadily, is now heavily driven by its African operations. In fact, over 50% of its balance sheet is derived from its African subsidiaries —a remarkable milestone that underscores UBA’s deep integration into the economies across the continent.

The Group’s results, which were released to the Nigerian Exchange Limited (NGX) on Friday 3 May 2024, saw outstanding year-on-year increases: Gross Earnings rose by 110%, from N271.1 billion to N570.2 billion; Interest Income grew by 130%, to N440.7 billion. Operating Income increased by 115%, from N175.7 billion in 2023 to N378.59 billion.

Further consolidating the record performance delivered in the Group’s 2023 Full Year Audited Financials, UBA again saw Profit Before Tax rising significantly by 155% from N61.7 billion in Q1 2023 to N156.34 billion in Q1 2024; while Profit After Tax jumped from N53.5 billion to N142.5 billion, representing an impressive rise of 165% year-on-year.

“The vision of going into these countries is paying off and will continue to pay off. We will continue to invest in Africa and deepen our market share. Our market share in those countries is improving and if you go to some of these countries, UBA is one of the top three banks and they appreciate the contribution of the bank to their economy,” said Oliver Alawuba, the Group Managing Director of UBA Plc.

With nearly two decades since the last recapitalisation effort, the banking sector is once again poised to play a crucial role in accelerating economic growth and achieving the Nigerian government’s 2030 vision of a trillion-dollar economy.

On 28 March 2024, the CBN announced a directive for banks in Nigeria to recapitalize with the pivotal objectives of strengthening the banking industry and mitigating systemic risks. The CBN’s new guidelines on the minimum capital requirement for banks range from N50 billion to N500 billion —depending on the type of licence held by the bank— and the fresh funds must not necessarily be related to the existing shareholder funds. In total, approximately N4.14 trillion is expected to be raised between now and March 31, 2026.

Experts have said true financial security and wealth creation comes from owning assets whether stocks, bonds, or a piece of real estate. In all, as they encourage people to own assets of different classes, they are always making a case for people to own shares of banks, especially UBA Plc whose share stood at N24.25 per unit at the close of Wednesday’s trading.

These analysts relayed their trust and overall satisfaction with the bank, as well as recommended it to other investors. They rated the bank on five criteria: trustworthiness, terms and conditions (such as fees and rates), customer service (wait times and helpfulness of employees), digital services (ease of using the website and app), and quality of financial advice.

However, a significantly challenged macroeconomic environment, characterised by high inflation following the significant devaluation of the naira, presents a more difficult hurdle for banks this time around. But despite Nigeria’s macro headwinds which trigger the proposed upward review of the banks’ capital base, Alawuba exercises no fear with UBA’s huge customer deposits of N18 trillion, shareholders’ fund of N2 trillion and customer base of about 45 million across Africa. Indeed, UBA operates with the highest licence available —which is an international licence.

On the value proposition of UBA to investors ahead of the fresh banking sector recapitalisation, the UBA GMD speaks more with a strong conviction; ”UBA is that bank that investors can look onto. In 2023, our capital appreciation was one of the highest on the exchange. For the past two years, our dividend yield has been above 12% and when you look at the bank presence in 24 countries, it shows a diversification of income stream but also highlights the unique investment proposition we offer,” Alawuba said.

While projecting that the shares of UBA could hit N100 per unit on the stock exchange, the bank boss added, “When you invest in UBA shares, you are essentially gaining exposure to the economic potential of 24 different markets. Therefore, it is crucial for us to communicate to Nigerian investors that UBA’s current share price is undervalued, presenting a substantial opportunity for those looking to invest in a bank with a truly global footprint.”

With a focus on sustainability, innovation, and inclusivity, UBA is not only a financial institution but a key enabler of Africa’s long-term growth and global integration. These have positioned the bank well for the future.

With generous bonuses and promotions and a variety of products, UBA has become a popular choice for consumers across the continent.

As the bank celebrates 75 years, it reassures customers of its commitment to strong corporate governance built on the foundation of trust, adaptability, strong relationships, innovation, and service excellence.

Banking

Fidelity Bank GAIM 6 Promo Produces 20 Additional Millionaires

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fidelity bank gaim 6 promo

By Aduragbemi Omiyale

No fewer than 20 fresh millionaires have emerged in the Fidelity Bank Plc Get Alert in Millions (GAIM) Season 6 promo.

They winners were picked at the second and third monthly draws of the financial institution held at its corporate headquarters in Lagos recently.

The events were monitored by the representatives of relevant regulatory bodies, including the South-West Zonal Coordinator of the Federal Competition and Consumer Protection Council (FCCPC), Mrs Aboluwade Margaret; and the Principal Legal Officer of the Lagos State Lotteries and Gaming Authority, Oyinkan Kusamotu.

A statement from the lender disclosed that the 20 lucky winners were randomly selected through an electronic draw across Lagos, North, Abuja, South-West, South-South, and South-East zones and would be rewarded with N1 million each.

The Fidelity Bank GAIM campaign was launched in November 2024 and about N19.75 million has been won by 869 customers across different categories.

The GAIM 6 campaign, which will run until August 2025, is set to reward lucky customers with a total of N159 million.

Speaking at the draws, the promo Chairperson and Executive Director for Lagos and South-West, Fidelity Bank, Dr Ken Opara, noted that the GAIM 6 promo was designed to reward customers’ loyalty, encourage a savings culture, and promote financial inclusion across the country.

Dr Opara, represented by the Regional Bank Head for Ikoyi, Chetachi Okechukwu, said, “Fidelity Bank is dedicated to the financial well-being of our customers and this commitment inspired the launch of the GAIM Promo, designed to cultivate a strong culture of savings.

“Through this promo, customers have the chance to win substantial cash prizes up to N10 million by saving and transacting with their Fidelity Bank Savings accounts.

“In addition to the monetary rewards, winners will receive complimentary financial advisory services to secure and grow their wealth for the future.”

Fidelity Bank, ranked among the best banks in Nigeria, is a full-fledged Commercial Deposit Money Bank serving over 8.5 million customers through digital banking channels, its 255 business offices in Nigeria and United Kingdom subsidiary, FidBank UK Limited.

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Rand Merchant Bank Adopts Kachasi to Strengthen Trade Finance Operations

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RMB Union Systems Kachasi

By Modupe Gbadeyanka

As part of its commitment to deliver quality service to customers, Rand Merchant Bank (RMB) has finally embraced the trade finance software of Union Systems Limited (USL), Kachasi.

The lender said its migration from Finastra’s Trade Innovation (TI) to USL’s Kachasi is a testament to the strength, reliability and competitiveness of this homegrown solution.

Kachasi is Nigeria’s leading indigenous trade finance software built to empower banks with seamless automation, regulatory compliance, and enhanced operational efficiency.

The platform has consistently proven to be a game-changer in the trade finance sector, offering key features such as full compliance with statutory and local regulatory requirements, end-to-end automation of trade finance processes, compliance with international trade regulations, advanced risk management and reporting tools, as well as seamless integration with core banking, local portals and third-party systems.

RMB said its decision to integrate Kachasi into its operations reinforces the platform’s reputation as a trusted trade finance solution.

As international trade becomes more complex, financial institutions require cutting-edge technology to navigate regulatory requirements, mitigate risks, and ensure operational excellence.

“This win affirms our commitment to revolutionizing trade finance automation across Africa. As more financial institutions embrace Kachasi, we remain dedicated to delivering cutting-edge solutions that drive efficiency and elevate the banking sector,” the financial institution stated.

Also, the chief executive of USL, Mr Chuks Onyebuchi, said, “This partnership with Rand Merchant Bank marks a defining moment, not just for Union Systems Limited but for African-built fintech solutions on the global stage.

“The successful transition from Finastra’s Trade Innovation (TI) to Kachasi proves that our homegrown technology is not only competitive but also better suited to the evolving needs of banks and trade finance institutions.

“Kachasi’s seamless automation, deep integration capabilities, and understanding of the local and international trade landscape make it the ideal choice for financial institutions looking to drive efficiency and innovation. This achievement is a testament to our commitment to building world-class technology, and we are excited to support RMB in revolutionizing their trade finance operations.”

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Banking

TAJBank to Raise N20bn Mudarabah Sukuk to Fuel Business Expansion

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TAJBank

By Adedapo Adesanya

Nigerian non-interest bank, TAJBank, is finalising arrangements to raise the sum of N20 billion Mudarabah Sukuk to beef up its additional tier 1 capital with the aim of fueling its business expansion drive in the country.

The issuance is part of its larger N100 billion Sukuk programme.

The new investment initiative, which is coming two years after the issuance of the first-ever N10 billion Sukuk on the Nigerian Exchange (NGX) Limited in 2023, presents a unique opportunity for individuals and institutions to invest in an ethical instrument with a competitive 20.5 per cent per annum return.

The Mudarabah Sukuk, which is open to all investors, is designed to offer a stable and ethical investment option, allowing investors to participate in the bank’s profit-sharing ventures.

According to a statement, the the move underscores its commitment to expand access to innovative financial solutions and promoting financial inclusion in the country.

The Mudarabah Sukuk issuance terms and conditions are undergoing final regulatory assessment and approval processes.

The chief executive of TAJBank, Mr Hamid Joda, said, “We are excited to bring this Mudarabah Sukuk to the market, offering a compelling investment opportunity that aligns with ethical financial principles.”

“This listing on the NGX will enable a wider range of investors to participate in our growth and benefit from our profit-sharing model”, the banker added.

Mr Joda had, at the beating of the gong during the listing of the TAJBank’s maiden N10 billion Sukuk bond on the NGX in February 2023, assured investors that the bank’s board and management would ensure good returns on their investments.

Business Post reports that the bond was over-subscribed by over 115 per cent.

“As TAJBank gets the NGX’s endorsement today on its fund raising for operations, I want to assure all investors in the maiden Sukuk bond offer by our bank that the board and management will surpass their expectations in terms of return on their investment and other benefits,” he said.

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