Lagos, Nigeria – United Bank for Africa (UBA) has reached an all-time high on November 5, 2024, with its share price closing at N35.05, driven by strong investor interest following the bank’s impressive third-quarter results.
The surge comes after UBA reported a remarkable 101.88% year-on-year growth in pre-tax profit for Q3 2024, which rose to N194 billion. This pushed the nine-month total pre-tax profit to N603.48 billion, marking a significant leap from the N502.1 billion recorded in the same period in 2023.
Since the release of its third-quarter results on October 21, 2024, UBA’s stock has been on a strong upward trajectory, reflecting renewed investor confidence. The bank’s year-to-date performance stands at an impressive 38.4% gain, driven by the strong results and bullish sentiment across the Nigerian banking sector.
A Year of Volatility and Recovery
UBA’s stock price, which began the year at N25.65, had experienced some volatility, dipping to N20.30 by July amidst news of recapitalization. However, the stock rebounded sharply in August, gaining over 24% in March and continuing to rally through the second half of the year. By the end of October, it had crossed N29 per share, and on November 5, it surpassed N35, setting a new all-time high.
Key Catalysts: Q3 Results and Dividend Announcement
The key driver behind UBA’s recent stock performance has been its strong financials and strategic moves. The bank’s announcement of a record interim dividend of N2 per share for H1 2024, the highest among Nigerian banks, further amplified investor optimism.
In addition, UBA’s Q3 results, which included a significant increase in pre-tax profit, highlighted the bank’s operational efficiency and ability to optimize its cost of funds and operating expenses. Ugo Nwaghodoh, Executive Director of Finance & Risk Management at UBA, commented on the milestone, noting that the cost-to-income ratio had normalized around the 50% range, underscoring the bank’s improving operational performance.
Sector-wide Impact and Market Activity
UBA’s performance mirrors broader trends in the Nigerian banking sector, which saw a recovery in market sentiment starting in August. This resurgence was fueled by increasing trading volumes and positive outlooks on the Nigerian economy. In November, UBA saw its daily trading volumes surpass 200 million shares, signaling robust market participation.
The bank’s strategic leadership change in September also contributed to the positive market sentiment, with investors increasingly confident in the bank’s future growth prospects.
Looking Ahead
With its strong Q3 performance, significant market momentum, and ongoing strategic initiatives, UBA remains a key player in the Nigerian banking sector. The bank’s impressive share price rally signals continued investor confidence, positioning it for further growth in the months ahead.