Group Managing Director of United Bank for Africa (UBA), Oliver Alawuba, has expressed optimism that the bank’s stock could reach N100 (Naira) per share as it celebrates 75 years of many milestones.
“UBA operates across 24 countries, offering opportunities to connect Africa to the world. The market is repricing UBA, with significant growth in market value over the past year. Cross-border diversification supports earnings growth despite a one-time FX windfall,” Alawuba stated.
He added, “We will continue to see significant valuation growth.”
These remarks were made on Monday in Lagos, Nigeria, during the bank’s Global Press Conference to launch its 75th Anniversary celebrations.
The management team answered questions from various media outlets about the bank’s history, current operations, and future plans.
UBA currently trades at N21 per share, with a price-to-book value of 0.28 times. A valuation closer to its book value would place the shares nearer to N80.
UBA began operations in 1949 on Kakawa Street as the British/French Bank. It is one of Nigeria’s oldest banks and was the first to list on the NGX in 1978.
From its modest beginnings, UBA has expanded to 20 African countries and global hubs like New York, London, Dubai, and Shanghai, employing 25,000 staff and serving over 35 million customers.
All of UBA’s subsidiaries are profitable, contributing more than 50% of the bank’s total profit. UBA was the first bank in Nigeria to offer an IPO in 1970, the first to be listed on the NSE, and the only Sub-Saharan African bank with a deposit-taking license in the USA.
In 2023, UBA experienced a significant FX gain, leading to a notable increase in its balance sheet, although this was largely a one-time event.
UBA’s share price remained flat for nearly a decade until a surge in 2023. From 2019 to 2022, UBA’s share price averaged around N5 per share, despite consistent profitability and dividend payouts.
UBA Nigeria Plc reported its highest-ever gross earnings of N2 trillion in 2023, up from N835 billion the previous year.
This record-setting performance ranks among the highest in the banking sector for 2023.
Despite a current share price of N21, the bank still trades at less than 50% of its book value and 1x its price-to-earnings multiples.
Alawuba highlighted UBA’s appeal to investors: “Over the past two years, our dividend yield has consistently exceeded 12%.”
He also noted UBA’s pioneering initiatives, such as installing the first ATM in Nigeria, opening the first campus branch, establishing the first African subsidiary, and appointing the first female Chairperson in Nigeria.
UBA introduced mobile banking in Nigeria and deployed the country’s first chatbot. Additionally, 33% of UBA’s CEOs in its 20 African countries are women.
The bank’s financial strength and robust fundamentals are a testament to its commitment to creating value for stakeholders.
As the bank looks ahead, Olawuba emphasized UBA’s role as the payment bank for capital flows between Africa and the rest of the world. UBA recently signed an agreement with the African Continental Free Trade Area (AFCFTA), committing $6 billion to support the initiative.
“As we embark on the next phase of our journey, we urge all stakeholders to join us and help write the next chapter of our success.
….UBA’s extensive presence across 24 countries underscores its diverse income streams and unique investment proposition.
Investing in UBA shares means gaining exposure to the economic potential of 24 different markets. It’s essential to communicate to Nigerian investors that UBA’s current share price is undervalued, presenting a substantial opportunity for those looking to invest in a globally connected bank,” Alawuba emphasized.
On his part, Group Deputy Managing Director Muyiwa Akinyemi used the opportunity to thank all customers of UBA around the globe.
“Your consistent support and patronage over the years have been amazing.
You meet several people, they will tell you that they are third or fourth generation of UBA customers in their families, that their grandparents and parents were customers of UBA and their children currently carry UBA ATM cards, enrolled on our mobile banking and LEO chat bot banking. This is the strength of UBA,” he said.
Since its inception in 1949, UBA has evolved from a modest beginning in Lagos Island to a global financial institution with a presence in 20 African countries and 4 global financial nerve centres (New York, London, Paris and Dubai).
“Today we have over 25,000 Staff, over 35 million customers served through multiple channels – over 350,000 POS terminals, 2,000 ATM terminals, 1,000 Business Offices and 19.7 million Card Customers.
This milestone is not just a celebration of longevity, but a testament to resilience, innovation, and unwavering commitment to excellence that have defined UBA’s journey over the decades.
As we reflect on the significance of this epoch-making event, it is important to acknowledge that UBA means different things to different people.
For some, UBA is a trusted financial partner; for others, UBA is a beacon of stability and reliability, a development partner in various local communities as well as a catalyst for African development.”
