Union Bank of Nigeria (UBN) plans to issue about 12.2 billion ordinary shares of 50 kobo each to existing shareholders and employees to raise N50 billion in new equity funds as the first generation bank looks beyond its centenary.

Regulatory documents showed that UBN will issue 12.13 billion ordinary shares of 50 kobo each to existing shareholders at N4.10 per share, in a bid to raise N49.73 billion. The first generation bank will also be selling about 51.3 million ordinary shares of 50 kobo each at N5.67 under its Union Bank Long Term Transformation Incentive Plan. The proceeds of N291 million from the shares allotment to employees bring total combined offer size to N50.02 billion.

The rights issue will be pre-allotted to shareholders on the basis of five new ordinary shares for every seven ordinary shares held as at the close of business on Monday August 21, 2017.The bank has filed application with the Nigerian Stock Exchange (NSE) for approval to list the rights’ shares, one of the major final approvals necessary for the completion of the pre-offer process and opening of the subscription.

Already, the NSE has approved the allotment of shares under the bank’s Employee Share Scheme.

Chief Executive Officer, Union Bank of Nigeria (UBN) Plc, Mr. Emeka Emuwa, has said one of the main highpoints of the second half will be the raising of N50 billion new equity fund.

He said the N50 billion rights issue will be launched “in the third quarter once all regulatory approvals have been secured”.

According to him, the N50 billion capital increase will support UBN’s strategy to accelerate business growth and position itself as a leading commercial bank in Nigeria.

Key extracts of the six-month report of UBN for the period ended June 30, 2017 had shown that gross earnings rose by 23 per cent to N73.7 billion in first half 2017 as against N60.1 billion recorded in first half 2016. Profit before tax rose marginally by six per cent from N8.9 billion to N9.5 billion. Customer deposits grew by 15 per cent to N759.3 billion in 2017 as against N658.4 billion in 2016.