United Bank for Africa  is considering merging its Zambian unit with one or more other Zambian  banks  to meet a new regulatory minimum capital of $100m, its group chief executive said on Tuesday.

It is just one option being considered, UBA’s Chief Executive Officer, Mr. Phillips Oduoza, told an investors’ conference call.

 Reuters  also quoted him as saying  that the group returned to profitability in the first quarter, after a 2011 loss caused by bad-debt write -downs.

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

Shareholder funds for the Zambia unit stood at N2.48bn, 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 N76m.

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

Also, UBA Benin Limited, a subsidiary of UBA Plc, has recently facilitated the grant of $40m syndicated loan towards economic development of Benin Republic.

Specifically, UBA acted as lead arranger of  the $18m syndicated mid-term loan for the National Electricity Company of Benin Republic. The bank was also the co-arranger of the $32m syndicated mid-term loan for MTN Benin.

A statement by the company said that the $18m facility to the electricity firm had contributed to an improved power distribution in the country with positive impacts on its economy.

Source: Punch