UPDATE 1-Nigeria's UBA says plans 500 bln naira debt issue

* Fourth Nigerian bank to raise debt in recent weeks

* Banks seek to tidy up balance sheets before stricter regs

(Adds background)

By Oludare Mayowa

LAGOS, Sept 1 (Reuters) - Nigeria's United Bank for Africa (UBA.LG) said on Tuesday it planned to issue a 500 billion naira ($3.3 billion) bond, the latest bank seeking to tap a deepening debt market in sub-Saharan Africa's second biggest economy.

"We plan to raise about 500 billion naira in bonds," UBA spokesman Charles Aigbe said, but declined to give any further details.

A spokesman for the Nigerian Stock Exchange (NSE), one of the regulators which approves corporate bond issuance, confirmed the planned move but said no formal application had yet been received.

UBA is the fourth Nigerian bank to have announced plans in recent weeks to raise debt as Nigerian pension funds and asset managers become more comfortable with fixed income and less reliant on equities in their portfolios.

Guaranty Trust Bank (GTB.LG) last week obtained shareholder approval to raise a 200 billion naira bond. A week earlier, First Bank (FBNP.LG) also obtained shareholder approval to issue up to 500 billion naira of bonds in tranches. [ID:nLR136002]

Some of the banks are seeking to shore up their capital bases after heavy write-downs from stock market losses and to tidy up balance sheets before stricter financial reporting standards are implemented at the end of the year.

All Nigerian banks will be required to adopt a uniform financial year at the end of December, meaning they will no longer be able to bolster their balance sheet by borrowing from the interbank market.

The debt issuance plans pre-date a $2.6 billion bailout of five banks last month which were found by central bank auditors to be so dangerously undercapitalised that they posed a systemic risk. [ID:nTAT446691]

Three of the four banks to have announced debt issuance plans have already been cleared by central bank auditors.

Nigerian companies have not ventured into the corporate bond market for several years because of the high cost of issuing debt and tax concerns.

But Central Bank Governor Lamido Sanusi, who took over in June, said last week that proposals on making the interest on corporate debt tax-free and on reducing stamp duty should be approved soon. [ID:nLS719547]

Access Bank (ACCE.LG) was the last company to issue debt with a 13.5 billion naira bond in October 2006. It said last month it planned to raise fresh debt once that bond expires at the end of December. [ID:nLE373827]

Access Bank is among the 14 institutions in the country whose audit it still to be completed. ($1=150.91 Naira) (For more Reuters Africa coverage and to have your say on the top issues, visit: af.reuters.com/ ) (Writing by Nick Tattersall; Editing by Jon Loades-Carter)