United Bank for Africa (UBA) soared to an all-time high on the trading day ending November 5, 2024, closing at N35.05 per share, fueled by strong bullish momentum.
The surge follows the bank’s impressive 2024 third-quarter results, which revealed a 101.88% year-on-year growth in pre-tax profit to N194 billion, bringing the nine-month total to N603.483 billion.
Since the release of its Q3 results on October 21, 2024, UBA shares have experienced renewed investor interest, contributing to a year-to-date gain of a notable 38.40%.
The stock, which stood at N26.50 on the day of the announcement, rose to close October at N29.80. By early November, bullish activity has propelled it past the N35 threshold, setting a new all-time high.
Market Trends
UBA began the year at N25.65, hinting at the continuation of a bullish trend from the prior year. However, by January’s close, the stock dipped slightly to N24.40.
- February brought further declines, but in March, the stock rebounded sharply, erasing earlier losses with a 24.16% gain.
- Despite optimism, news of recapitalization in April initiated a period of decline, with the share price sliding to N20.30 by the end of July.
- From August onwards, UBA’s stock rallied, closing the month above N22 per share with a robust trading volume of 510 million shares.
- By September, the stock had reached N28.30, and by October, it closed above N29 with a trading volume of 1.15 billion shares.
- The resurgence peaked this November, with UBA shares crossing the N35 mark on the 5th, signalling robust investor confidence.
Key Drivers of Bullish Sentiment
- The renewed bullish sentiment in UBA’s stock aligns with broader trends in the Nigerian banking sector. Following a mid-year market retracement that wiped out earlier gains, August brought consolidation across the sector, reigniting investor confidence.
- Increased trading volumes for UBA during this period set the stage for its remarkable climb. Additionally, the bank announced a leadership change in September, further energizing market sentiment.
- However, the most significant catalyst came with the declaration of an unprecedented N2 per share interim dividend for shareholders, the highest payout among Nigerian banks for the first half of 2024. This announcement, paired with UBA’s stellar Q3 results, amplified investor confidence.
- The Q3 report detailed a 101.88% year-on-year increase in pre-tax profit, reaching N194 billion. Over nine months, pre-tax profits climbed to N603.483 billion, compared to N502.091 billion in the same period in 2023.
- This performance fueled increased market activity, with daily trading volumes surpassing 200 million shares on November 4 and 5.
Executive Insights
Commenting on the results, Ugo Nwaghodoh, Executive Director of Finance & Risk Management at UBA, stated:
“I am delighted at the milestone reached in driving operational efficiency, reflected in the cost-to-income ratio normalizing around the 50% range. We remain on track with various strategies to optimize our cost of funds and operating expenses.”
UBA’s strong performance and strategic decisions have bolstered its standing in the Nigerian banking sector, reflected in its share price surge and growing investor confidence.