United Bank for Africa: A Comprehensive Guide to Bonus Shares

United Bank for Africa (UBA) is a leading financial institution with operations in 20 African countries and the United Kingdom, the United States, and France. The bank offers a wide range of financial services, including corporate banking, retail banking, investment banking, and asset management.

Bonus Shares: An Overview

Bonus shares are additional shares issued by a company to its existing shareholders, free of charge. They are typically issued to reward loyal shareholders and to increase the liquidity of the company's shares.

UBA has a history of issuing bonus shares to its shareholders. The last bonus issue was in 2012, when the bank issued 1 bonus share for every 5 shares held.

Eligibility for UBA Bonus Shares

To be eligible for UBA bonus shares, shareholders must:

• Be registered shareholders of the bank as of the record date
• Hold their shares for a minimum period, typically 12 months
• Meet any other eligibility criteria set by the bank

Calculating Bonus Shares

The number of bonus shares received by each shareholder is calculated based on the following formula:

Number of bonus shares = Number of shares held x Bonus ratio

For example, if a shareholder holds 1,000 shares in UBA and the bonus ratio is 1:5, the shareholder will receive 200 bonus shares.

Benefits of UBA Bonus Shares

Bonus shares offer several benefits to shareholders:

• Increased shareholding: Bonus shares increase the number of shares held by shareholders, which can lead to increased dividends and capital gains.
• Enhanced liquidity: Bonus shares increase the liquidity of the company's shares by increasing the number of shares available for trading.
• Reward for loyalty: Bonus shares are a way for UBA to reward its loyal shareholders for their continued support.

Common Mistakes to Avoid

There are a few common mistakes that shareholders should avoid when it comes to bonus shares:

• Selling bonus shares too early: Bonus shares can be sold immediately, but it is typically more beneficial to hold them for the long term to benefit from potential capital gains.
• Ignoring the tax implications: Bonus shares may be subject to capital gains tax, which shareholders should be aware of before selling.
• Assuming that bonus shares are free money: Bonus shares are not free money, as they represent a portion of the company's retained earnings.

Conclusion

UBA has consistently rewarded its shareholders with bonus shares, which has benefited both the shareholders and the bank. Bonus shares provide a unique opportunity for shareholders to increase their shareholding, enhance liquidity, and participate in the growth of the bank.