United Bank for Africa (UBA) has delivered an impressive 375% capital gain to its investors over the past five years, significantly outperforming the Nigerian stock market and the financial services sector. Between December 2019 and December 2024, UBA recorded an average annual return of 75%, making it a high-yielding, inflation-hedging stock. An investor who had placed N500,000 in UBA shares at the beginning of 2020 would now see their investment grow to over N2.37 million, excluding dividends. The bank’s consistent dividend payments further enhance its appeal, with a recent interim dividend of N2 per share for the first half of 2024, marking one of the highest payouts among Nigerian banks.
UBA is currently offering existing shareholders an N239.4 billion rights issue, providing them an opportunity to increase their stake in the bank. The bank is issuing 6.84 billion shares at N35 each, with shareholders receiving one new share for every five shares held. The rights issue, scheduled to close on December 24, 2024, has garnered positive responses from shareholders, with many expressing a desire to apply for additional shares beyond their pre-allotted amounts. UBA’s strong financial performance, including an 83.2% growth in gross earnings for the first three quarters of 2024, has bolstered its position as one of the most attractive stocks on the Nigerian stock exchange.
Analysts agree that UBA’s share price reflects its solid past performance and promising future prospects. The bank’s 2024 financial results showed substantial growth in both deposits and loans, alongside a 51% rise in operating income. The successful implementation of technology-led initiatives has contributed to increased customer deposits and enhanced brand appeal. As a result, UBA’s stock remains a favorite among both retail and institutional investors, with its continued strong performance and upcoming rights issue viewed as a solid investment opportunity. Shareholders and market analysts alike are optimistic about the bank’s future growth, supported by its robust financial health and strategic initiatives.