Summary of Proposed Investment
Project Number
24574
Company Name
UNITED BANK FOR AFRICA PLC
Date SPI Disclosed
Nov 11, 2005
Country
Nigeria
Industry
Financial Markets
Projected Board Date
Dec 15, 2005
Status
Completed
Sector
Commercial Banking - General
Date Revised SPI Disclosed
Nov 16, 2005
Department
Global Industry, Financial Markets
Environmental Category
FI
Previous Events
Approved : Feb 9, 2006
Signed : Mar 20, 2007
Invested : Jun 27, 2007
Project Description
The project consists of:
- a partially convertible senior loan of up to $50 million to support the long-term lending activities of newly merged, United Bank of Africa (“UBA”), now the largest commercial bank in Nigeria in terms of total assets and;
- an IFC partial guarantee (“PCG”) amounting to approximately $25 million to support a local currency denominated bond offering for UBA to support its residential mortgage lending program.
The “New UBA” was formed as a result of an effective takeover of UBA by Standard Trust Bank (“STB”), the fifth largest bank in terms of assets in Nigeria. The merger which was announced in January, 2005 was approved by the regulators in July, 2005 .The merged entity now controls approximately $3 billion in assets (14% of the banking sector) and $360 million in shareholders equity. The bank also has over 400 branches spread through out Nigeria.
UBA intends to use the proceeds from IFC’s term loan to:
- leverage its large equity base and
- to provide scarce funding to its corporate and SME clients for their capital expenditures.
The $25 million PCG is expected to support up to Naira (“N”) 13 billion (approximately $100 million equivalent) issuance with a maturity of up to 10 years. The Naira proceeds of the issue are expected to be used mainly for the provision of mortgage loans to be originated by UBA.
- a partially convertible senior loan of up to $50 million to support the long-term lending activities of newly merged, United Bank of Africa (“UBA”), now the largest commercial bank in Nigeria in terms of total assets and;
- an IFC partial guarantee (“PCG”) amounting to approximately $25 million to support a local currency denominated bond offering for UBA to support its residential mortgage lending program.
The “New UBA” was formed as a result of an effective takeover of UBA by Standard Trust Bank (“STB”), the fifth largest bank in terms of assets in Nigeria. The merger which was announced in January, 2005 was approved by the regulators in July, 2005 .The merged entity now controls approximately $3 billion in assets (14% of the banking sector) and $360 million in shareholders equity. The bank also has over 400 branches spread through out Nigeria.
UBA intends to use the proceeds from IFC’s term loan to:
- leverage its large equity base and
- to provide scarce funding to its corporate and SME clients for their capital expenditures.
The $25 million PCG is expected to support up to Naira (“N”) 13 billion (approximately $100 million equivalent) issuance with a maturity of up to 10 years. The Naira proceeds of the issue are expected to be used mainly for the provision of mortgage loans to be originated by UBA.
Sponsor / Cost / Location
Development Impact
Related ESRS/ERS
Contacts
For Inquiries About the Project, Contact
Main Sponsor Contact
Name:Bunmi Akinremi/ Francis Kalitsi
Title Head, International Business/ Investment Officer
Telephone Number (202) 473-1000
Fax Number (202) 477-6391
Address 2121 Pennsylvania Ave., NW, Washington, DC 20433
Name:Bunmi Akinremi/ Francis Kalitsi
Title Head, International Business/ Investment Officer
Telephone Number (202) 473-1000
Fax Number (202) 477-6391
Address 2121 Pennsylvania Ave., NW, Washington, DC 20433