Login to your account

Username *
Password *
Remember Me

Following the approval of its restructuring plan, United Bank for Africa Plc (UBA), is headed for the biggest gain in more than six years after its commercial banking business was listed on Nigerian Stock Exchange (NGSE).

The stock which recorded the highest price appreciation yesterday, gained 9.8 per cent to N5.14, the highest daily gain it has recorded since August 8, 2006. The commercial banking unit was listed on the Exchange yesterday at N4.26 per share.

According to a statement by the bank, its non-commercial banking and capital market businesses, UBA Capital, will be listed as a separate company on Friday January 11, along with Africa Prudential Registrars.

The Central Bank of Nigeria introduced regulations that required lenders to spin off non- banking units, or adopt holding company structures to retain them, as part of reforms after the near-collapse of the industry because of a debt crisis.

Speaking on the development, banking analyst at Vetiva Capital Management Limited, Abiola Rasaq, said the new structure would enable UBA to focus on its "core competence". He furthered said that "the bank has more competence in commercial banking so this new arrangement will help it to remain focused."

Rasaq noted that the former group was being priced with a "conglomerate discount" given the weak synergy of the businesses that are now spun off although he declined to say how far the stock will rise this year, pointing out that Vetiva was yet to officially publish its 2013 target price for UBA.

At the end of trading at the stock exchange, a total of 529.79 million shares valued at N3.70 billion were exchanged by investors in 6,857 deals, while the market capitalisation and All Share Index rose to N9.297 trillion and 29,089.52 respectively.

Source: Leadership


Related Articles