Nigeria's UBA plans to raise capital through a private placement and a rights issue to help support large-ticket lending in infrastructure and agriculture sectors in sub-Saharan Africa's second biggest economy, the bank said on Monday.
UBA, the third-largest lender by total assets in Africa's top oil exporter, did not disclose how much it intended to raise and said it had yet to finalize the pricing of the issue.
"We are going to do a private placement as well as a rights issue," said Victor Osadolor, managing director for UBA Capital Holdings.
"In terms of pricing, we have not finalised on it yet," he told a conference call.
UBA currently trades at about 3.15 naira per share on Nigeria bourse but Osadolor said the market price did not reflect the fundamentals of the bank which he expected should be trading at around 8 naira.
He said the rights issue, which will be launched at a discount to market price, will take place after the private placement and that the bank aimed to hold enough capital to cover its deposit liabilities while creating risk assets.
Osadolor said UBA has a capital adequacy ratio of 20 percent and achieved deposit growth rates of 20 percent in the nine months to September. He said the bank would create loans without breaching the regulator's limits on a bank's exposure to a single borrower.
"The capital itself will enable us lend a lot of the deposits we are generating," Osadolor said.
Last October, UBA raised about 20 billion naira via a bond issue to bolster capital and help increase lending.