Nigeria’s United Bank for Africa looking to merge Zambian unit with local lenders

(Reuters) – Nigeria’s United Bank for Africa (UBA) is considering merging its Zambian unit with one or more other local lenders to meet a new regulatory minimum capital of US$100 million, its group chief executive said on Tuesday.

It is just one option being considered, chief executive Phillips Oduoza told an investors’ conference call. He also said the group returned to profitability in the first quarter, after a 2011 loss caused by bad-debt writedowns.

Zambia’s central bank raised the minimum capital for foreign banks operating in the country from around 12 billion kwacha (US$2.3 million) to 520 billion kwacha (US$100 million), a move it said would help boost the country’s financial sector.

Shareholder funds for the Zambia unit stood at 2.48 billion naira (US$16 million), it said in a presentation to investors.

The bank said African operations outside Nigeria had turned profitable in the first quarter, with 12 out of 18 subsidiaries reporting pre-tax profits. The Zambia unit posted a pre-tax loss of 76 million naira (US$480,000).

Oduoza said the pan-African lender will tap equity markets to raise finance in order to boost its African operations when stock markets improve.