UBAPLC:
United Bank for Africa (UBA), ticker symbol UBA, is a leading pan-African financial services group headquartered in Lagos, Nigeria. With a strong presence across the continent, UBA has established itself as a pivotal player in the African banking sector. However, the bank faces significant challenges due to the ongoing economic tensions in Nigeria, impacting its financial performance and stock price.
In our last post about United Bank for Africa (UBA), dated August 07, 2024 , we discussed the bank’s impressive performance amid a challenging economic environment. As of Q3 2023, UBA has continued its stellar performance trajectory, with significant growth across key financial metrics.
In Q3 2023, UBA reported a 115% year-on-year increase in gross earnings, reaching ₦1.309 trillion, compared to ₦608 billion in the same period the previous year. This growth was driven by a sharp increase in both interest and non-interest income, demonstrating the bank’s ability to diversify revenue streams. Most notably, UBA’s Profit Before Tax (PBT) surged by an impressive 263%, reaching ₦502.01 billion, while Profit After Tax (PAT) grew by 287% to ₦449.3 billion.
The bank’s total assets also saw a 49.5% increase, climbing to ₦16.24 trillion, bolstered by rising customer deposits and strong balance sheet management. UBA’s return on average equity (ROAE) soared to 44.4%, a remarkable leap from the 19.7% recorded in December 2022, reflecting enhanced profitability and efficiency. However, it’s worth noting that foreign exchange (FX) gains, a significant contributor to UBA’s Q2 performance, declined substantially in Q3, which may affect future profitability.
As UBA looks to close out the year, it is poised to exceed its performance guidance for 2023, with continued strong returns to shareholders through dividends and capital appreciation.
From the Elliot Wave chart below, UBA is still in a correction and making a W-X-Y pattern. IF this count is correct, then we expect a triangle pattern followed by a further move to the upside with potential targets at 33.7 and 39.7 which are 100% an 262.8% of wave A.
