United Bank for Africa (UBA) Plc has delivered an exceptional 375 percent capital gain to investors in nearly five years, surpassing both the Nigerian stock market average and the financial services sector as a whole.
According to data from the Nigerian stock market, UBA investors have enjoyed an average annual return of around 75 percent over the period, showcasing UBA’s strength as a high-yield, inflation-resistant investment.
Between December 31, 2019, and December 6, 2024, UBA achieved a cumulative capital gain of 374.83 percent, resulting in an average annual return of 74.97 percent. This means that an investor who initially invested N500,000 in UBA shares at the beginning of 2020 now holds a market value of over N2.374 million, excluding any cash dividends earned during the period.
UBA has established itself as a shareholder-friendly company, consistently offering above-average cash dividends. In 2024, UBA paid an interim dividend of N2 per share based on its half-year results, marking the highest payout by any Nigerian bank and one of the top three in the stock market.
An investor who invested N500,000 in UBA shares in 2020 would have received approximately N139,860 as interim dividends for the 2024 financial year alone, representing over 25 percent of their initial investment.
UBA is currently undertaking a N239.4 billion rights issue, providing shareholders with an opportunity to increase their stakes. The bank is issuing 6.84 billion new shares at N35 per share, with a ratio of one new share for every five held as of November 5, 2024. The rights issue is set to close on December 24, 2024.
Retail shareholders, who make up almost three-quarters of UBA’s 280,000 shareholders, have enthusiastically embraced the rights issue. Many are applying for more shares than their pre-allotted rights, while others are trading their rights in the stock market, taking advantage of favorable existing rules.
UBA’s outstanding performance has been a significant driver of the bullish trend in the Nigerian stock market, which has seen five consecutive years of positive returns. The Nigerian Exchange’s benchmark All Share Index (ASI) has consistently ranked among the world’s top-performing markets, with average returns of 45.90 percent in 2023 and substantial gains in previous years.
In 2024, the ASI has achieved an average year-to-date return of 31.34 percent, with UBA outperforming with a 35.26 percent year-to-date return, more than double the 15.53 percent average return for the banking sector.
UBA’s capital gain also surpasses key indices such as the NGX 30 Index, NGX Premium Index, and NGX Pension Index, highlighting its status as a premium investment choice.
Despite Nigeria’s challenging economic environment, with high inflation and benchmark interest rates, UBA has maintained its position as a reliable and high-performing investment. The bank’s share price has seen a remarkable 375 percent increase from N7.15 in 2020 to N33.95 at present.
Notable long-term shareholders, including Sir Sunny Nwosu and Faruk Umar, have praised UBA for its consistent performance and shareholder-friendly policies, urging fellow investors to take advantage of the ongoing rights issue.
UBA’s financial performance continues to drive its market success, with significant growth reported in gross earnings, operating income, profit before tax, net profit after tax, and total assets for the nine months ending September 30, 2024.
Market experts attribute UBA’s impressive performance to strong fundamentals and strategic foresight. The bank’s consistent growth and profitability make it a compelling investment option in the eyes of experts.
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