Stock Rating: BUY
Price Target: N33.30
Price (25 April 2024): N22.80
Potential Upside (Downside): +46.1%
Ticker: UBA NL
SAT APRIL 27 2024-theGBJournal| Coronation Research has initiated coverage of UBA Plc, giving the pan-African banking institution a ”BUY” rating and a price target of of N33.30.
In its evaluation, Coronation factored in the bank’s Financial Performance and asset quality. This includes its impressive topline and bottom-line earnings in its FY23 audited financial results.
Pre-tax profits and Net Profits grew by 277.2% y/y and 261.6% y/y, respectively. Q4 performance was also strong, with Pre-tax profits advancing by 309.7% y/y and Net profits up by 191.8% y/y.
Similarly, the banks non-performing loans ratio rose to 5.9% (vs 3.0% in FY22) above the regulatory limit of 5.0% owing to a challenging macroeconomic environment.
Elsewhere, the group’s Capital Adequacy Ratio (CAR) closed at 32.6%, significantly above the minimum regulatory limit of 15.0%.
Coronation Research notes that the bank’s fees and commission income for the period grew 47.4% y/y crossing the N300bn mark for the first time, supported by electronic banking income, commission on transactional services, and credit-related fees and commissions.
On recapitalisation, the group has announced plans to raise more capital both from local and international markets.
UBA Plc shares are NGX Exchange listed and Friday’s price at close of trade was N23.00, up +0.88% in the day.
X-@theGBJournal|Facebook-the Government and Business Journal|email:gbj@govbusinessjournal.com|govandbusinessj@gmail.com
