United Bank for Africa (UBA) made headlines on Monday by announcing a record-breaking N2 per share interim dividend for its shareholders, marking the highest interim payout among Nigerian banks in the first half of 2024. This bold move boosted investor confidence, resulting in a significant 9.99% surge in UBA’s stock price, which closed at N28.30 per share on the Nigerian Exchange (NGX). UBA’s strong financial performance, highlighted by its impressive half-year results, was the driving force behind the dividend and stock price surge.
Half-Year Financial Performance
According to UBA’s H1 2024 results, the bank reported N401.5 billion in pre-tax profits, slightly down from N403.6 billion in the same period last year. However, the highlight was a staggering 395% increase in net interest income, which reached N614.4 billion after impairments, compared to N124.1 billion in 2023. This robust performance was driven by core business fundamentals rather than foreign exchange gains, setting UBA apart in a challenging economic environment.
Record Dividend Payout
UBA’s decision to declare a substantial N2 interim dividend, amounting to N68.4 billion, reflects a 21.6% dividend payout ratio—one of the highest in the Nigerian banking industry. For context, other major banks like GTBank, Access Bank, and Zenith Bank reported far lower payout ratios for the same period. UBA’s ability to reward shareholders, despite broader economic challenges, underscores its solid financial health and cash reserves.
Share Price Surge and Market Sentiment
Following the dividend announcement, UBA’s share price surged by 9.99%, leading the gainers’ chart on the NGX. This rally pushed UBA’s year-to-date (YTD) gain to 10.3%, while over the past year, its stock has risen by 68.4%, showcasing strong investor confidence in the bank’s long-term prospects. Shareholders registered by October 14, 2024, will qualify for the dividend, which will be distributed on October 22, 2024.
UBA’s record dividend payout and stellar financial performance reaffirm its position as one of the best-performing banking stocks on the NGX.
